1. We defined the factor of production ‘land’ to include raw materials. Does the analysis of rent that we have just been looking at apply to raw mater
1. We defined the factor of production ‘land’ to include raw materials. Does the analysis of rent that we have just been looking at apply to raw materials?
\r\n2. The supply of land in a particular area may be totally inelastic, but the supply of land in that area for a specific purpose (e.g. growing wheat) will be upward sloping: the higher the price of wheat and thus the higher the rent that wheat producers are prepared to pay, the more will be made available for wheat production. Using the concept of transfer earnings, what will determine the elasticity of supply of land for any particular purpose?