Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 14 - Rent, Interest, and Profit - Questions - Page 310: 2

Answer

The total supply of land is fixed. As a population in civilization increases so can rent prices ; however over time as rent declines there is no change in the amount of land that can be provided therefore there is no incentive. No more land can be added to an economy.

Work Step by Step

To understand this concept think of rent objectively. No matter the changes in price the amount of land is constant and cannot be changed. The supply of land is inelastic.
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.