Modern Theory of Rent:
The modern theory of rent states that rent is the payment made for the use of land and other natural resources. It is determined by the difference between the marginal productivity of the land and the marginal productivity of the least productive factor of production.

Elasticity of Supply of a Factor and Rent:
- The elasticity of supply of a factor refers to how responsive the quantity supplied of that factor is to changes in its price.
- In the context of rent, the elasticity of supply of a factor affects the level of rent that can be charged for the use of that factor.
- If the supply of a factor is inelastic, meaning that the quantity supplied does not change significantly in response to changes in price, then rent is likely to be higher.
- This is because land and other natural resources are often limited in supply, so even a small increase in demand can lead to a significant increase in rent.
- On the other hand, if the supply of a factor is elastic, meaning that the quantity supplied changes significantly in response to changes in price, then rent is likely to be lower.
- In this case, landlords or owners of natural resources may have to lower rent in order to attract tenants or users of the resource.
- Overall, the elasticity of supply of a factor plays a crucial role in determining the level of rent that can be charged for the use of land and other natural resources.