Author Question: Suppose the supply of land is infinitely inelastic and the demand for land is downward sloping but ... (Read 86 times)

londonang · **on:** Jul 1, 2018

Suppose the supply of land is infinitely inelastic and the demand for land is downward sloping but inelastic at the current equilibrium. If the supply curve shifts rightward (e.g.

, previously unusable land is cleared for production), what happens to the aggregate economic rents in this market? A) Decrease
B) Increase
C) Remain the same
D) We do not have enough information to answer this question.

Question 2

The oligopoly model that predicts that oligopoly prices will tend to be very rigid is the ________ model.

A) Cournot
B) Stackelberg
C) dominant firm
D) kinked demand