Multiple Select QuestionSelect all that applyWhich of the following are determinants of demand for land?Multiple select question.The prices of the products produced on the landThe price elasticity of demand for landThe productivity of the landThe prices of other resources that are combined with the landThe price of land
Question
Multiple Select QuestionSelect all that applyWhich of the following are determinants of demand for land?Multiple select question.The prices of the products produced on the landThe price elasticity of demand for landThe productivity of the landThe prices of other resources that are combined with the landThe price of land
Solution
The determinants of demand for land include:
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The prices of the products produced on the land: If the products produced on the land are high in price, the demand for land will increase as it can generate more income.
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The productivity of the land: If the land is highly productive, the demand for it will be high. This is because productive land can generate more output and hence more income.
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The prices of other resources that are combined with the land: If the prices of other resources that are combined with the land (like labor, capital etc.) are high, the demand for land will decrease. This is because the cost of production will increase which will reduce the profitability of the land.
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The price of land: If the price of land is high, the demand for it will be low and vice versa. This is because price is a major determinant of demand for any commodity.
The price elasticity of demand for land is not a determinant of demand. It is a measure of how much the quantity demanded of a good responds to a change in the price of that good.
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