The current value of the marginal product of land influences the
A)demand for land.
B)equilibrium rental price of land.
C)equilibrium purchase price of land.
D)all of the above.

Question

Quizplus · Accepted Answer

The current value of the marginal product of land (the additional output that can be produced from an additional unit of land) affects the demand for land, as it determines the profitability of using land for production. It also affects the equilibrium rental price of land, as landowners will be willing to rent their land at a higher price if the marginal product of land is high. Finally, it affects the equilibrium purchase price of land, as buyers will be willing to pay a higher price for land that has a higher marginal product. Therefore, all of the above options are affected by the current value of the marginal product of land.

The Current Value of the Marginal Product of Land Influences