Concept:In the short run, the supply of land is perfectly inelastic, meaning the quantity of land cannot change.
Therefore, any increase in demand for land affects only its price, not its supply or quantity supplied.
Explanation:A rise in demand for land shifts the demand curve to the right, from
D to
D1.
Because land is fixed in the short run, the supply curve is a vertical line,
S.
The new equilibrium moves from
e to
e1.
This leads to an increase in the equilibrium price of land, from
P to
P1.
However, the quantity of land remains unchanged at
Q, since supply cannot expand in the short run.
Thus, the increase in demand causes price to rise, while supply and quantity supplied stay constant.
Answer:A. price only.
