Chapter 70, Problem 2MCQ

To determine

What a very steep supply curve for land indicates?

Answer to Problem 2MCQ

From the available options, the correct option is “c”, it is very costly to increase the quantity of land supplied.

Explanation of Solution

A steeper supply curve means it is a more inelastic supply curve, which shows a small increase in the quantity demanded land leading to a large increase in price. Therefore, options a, d, and e are incorrect. A steep supply curve for land represents that a small change in quantity demanded would lead to a high price of the land; therefore, the quantity of land supplied is not very responsive to the price change, which means option b is incorrect.

But a supply curve experiences a change in price according to the demand and vice versa, which shows option c is correct because it is very expensive to find new supplies or increase the quantity of land according to the demand.

Economics Concept Introduction

Introduction: A supply curve represents the graphical information about how supply is sensitive to demand or price.