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Why supply of land is relatively elastic from the point of view of a firm?
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Why supply of land is relatively elastic from the point of view of a f...
Introduction
The supply of land is relatively elastic from the point of view of a firm because land is a fixed factor of production. This means that the quantity of land available for use in production cannot be increased or decreased in the short run. However, there are several reasons why the supply of land is relatively elastic in the long run.
Factors that make the supply of land relatively elastic
- Land can be brought into production: Land that was previously unused or underutilized can be brought into production in response to changes in demand. For example, if the demand for housing increases, developers may purchase previously unused land and develop it into housing units. This increases the supply of land available for use in production and makes the supply of land relatively elastic.
- Land can be substituted: In some cases, land can be substituted with other factors of production. For example, if the price of land increases, firms may choose to use more labor or capital instead of land. This reduces the demand for land and makes the supply of land relatively elastic.
- Technology can increase the productivity of land: Technological advancements can increase the productivity of land, allowing firms to produce more output with the same amount of land. This increases the effective supply of land and makes the supply of land relatively elastic.
- Land can be used for different purposes: Land can be used for a variety of purposes, such as agriculture, housing, commercial development, and recreation. This flexibility allows land to be allocated to the most profitable use, increasing the supply of land available for use in production and making the supply of land relatively elastic.
Conclusion
In conclusion, the supply of land is relatively elastic from the point of view of a firm because of the various factors discussed above. While land is a fixed factor of production in the short run, the ability to bring new land into production, substitute other factors of production, increase the productivity of land through technology, and allocate land to the most profitable use all contribute to the elasticity of the supply of land in the long run.
Community Answer
Why supply of land is relatively elastic from the point of view of a f...
From the economy point of view supply of land is inelastic as we cannot size of the land
but from the firm point of view supply of land is relatively elastic since the firm can increase the supply of the land by purchasing more of it , we are not creating new land but we are increasing the supply of the land by purchasing it hence from the firm point of view it is relatively elastic
but from the firm point of view supply of land is relatively elastic since the firm can increase the supply of the land by purchasing more of it , we are not creating new land but we are increasing the supply of the land by purchasing it hence from the firm point of view it is relatively elastic
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Why supply of land is relatively elastic from the point of view of a firm?
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Why supply of land is relatively elastic from the point of view of a firm? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Why supply of land is relatively elastic from the point of view of a firm? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Why supply of land is relatively elastic from the point of view of a firm?.
Why supply of land is relatively elastic from the point of view of a firm? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Why supply of land is relatively elastic from the point of view of a firm? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Why supply of land is relatively elastic from the point of view of a firm?.
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