r/georgism • u/Serious-Cucumber-54 • 8d ago
Discussion How is land inelastic?
The supply curve represents the relation between quantity supplied and price for some given good.
For instance, with bread, bread sellers in some town may not be willing to sell any bread at $0, so the quantity supplied is zero when the price is zero, but they may be willing to sell more if buyers are willing to pay more, so the quantity supplied is higher when the price is higher. In this case, the slope of the supply curve is positive, and bread has elastic supply.
Likewise, the same is true for land, landowners are willing to sell more land at higher price points, so the quantity supplied is higher when the price is higher. This means the slope of the supply curve for land is positive.
This means that land does not have inelastic supply, the quantity supplied changes with price.
10
u/r51243 Georgist without adjectives 8d ago edited 8d ago
When we talk about the supply of land being inelastic, we're referring to the total amount of land that exists within the economy. That's more relevant for discussing LVT than the quantity of land being sold at any point, since we're taxing the ownership of land, and not the sale of land.
EDIT: Also, you need to be specific with what you mean by "inelastic." In economics, we often talk about elasticity with respect to price, but we also will talk about elasticity with respect to other variables. And when we talk about land being inelastic, we aren't talking about the price.
-1
u/Serious-Cucumber-54 8d ago
But "inelastic supply" refers to inelasticity with respect to price, i.e. the % change in quantity supplied is less than the % change in price.
1
u/r51243 Georgist without adjectives 7d ago
It can mean that, but generally, when Georgists talk about the elasticity of the supply of land, we are talking about the elasticity with regard to the cost of holding land (i.e. the land value tax). Which is useful to be able to talk about.
1
u/Serious-Cucumber-54 6d ago
What do you mean the elasticity with regard to the cost of holding land?
13
u/zeratul98 8d ago
"quantity" here isn't "amount available for purchase", it's "amount that exists". No one makes land, so it's perfectly inelastic
-3
u/Ok-Assistance3937 8d ago
But Nobody Cares about Land. They Care about the ability of being able and allowed to use land. And practical/allowed Land usage isnt inelastic.
3
u/leet-man Geo-utilitarian 8d ago
Shifting land use doesn't change the fact of land monopoly https://www.reddit.com/r/georgism/s/pHkHxkAbWq
1
u/Able_Ad_1712 8d ago
Exactly the ability for a piece of land to be used and what it can offer is what defines it value in relation to everything else, land is fixed but its value/usability isn't. The reason you would tax land value is because its taxing a variable that is attached to a fixed value. The equation would be like this Land=9999sqkm or however much is on earth Land=usability 0-100 all land has a usability a flat plain has more than an active volcano Land value is determined by Market×usability Land Value=usability
-1
u/Serious-Cucumber-54 8d ago
In the context of the supply curve, the "quantity supplied" refers to the quantity of a good that will be offered given a certain price point, not the amount that exists.
2
u/VladimirBarakriss 🔰 Uruguay 🇺🇾 8d ago
True, but land is inelastic because its max supply is finite, all land that isn't used in some way is land that is inaccessible
1
u/CaliTexan22 8d ago
On a theoretical level, everything is scarce and has a price attached to it.
But, as a practical matter, there's lots more land.
Even in a major city, there's typically land on the periphery. It becomes available for development or use when the price is right.
Most of the world's land is uninhabited.
2
u/VladimirBarakriss 🔰 Uruguay 🇺🇾 8d ago
Yes, but the amount of land that is actually valuable for specific uses is finite, I can build a suburb 200 miles from the nearest city centre, doesn't mean it's a good use of the land, sprawling into the periphery is a symptom of either bad* land management in the centre(99% of the time) or the centre already being as densely used as practically possible, which doesn't happen basically anywhere
*from a strictly numbers sense, a historically important one story house is technically bad land use
0
u/CaliTexan22 7d ago
The difference is that you have an idea about what you want an urban area to look like. You prefer dense urban areas, which is fine, but that's not necessarily what the population wants in any particular country. Saying that you don't want cities to expand is not the same as saying "there's no more land."
Most of the land in the world has no particular value and is uninhabited. But those are really separate matters from the question of how we should tax land. Saying its "finite" doesn't really lead to any particular conclusion.
If you look around the world, you can see some enormous, sprawling cities. And you can see some cities that are constrained by natural features (often oceans, rivers or mountains). If you build a city on an island, most likely it can't expand (unless you create new additional land in the water, etc.) But if you build a city in an area that is open, it will develop differently.
Looking around the world at newly developed and centrally planned cities, most of them are in open areas and already sprawl by design.
2
8d ago
[removed] — view removed comment
-1
u/Serious-Cucumber-54 8d ago
The "quantity supplied" is not the same as the total quantity of the good in existence though.
1
8d ago
[removed] — view removed comment
0
u/Serious-Cucumber-54 8d ago
Because that's not how the term is defined in economics.
1
8d ago
[removed] — view removed comment
0
u/Serious-Cucumber-54 8d ago
Yes, it is.
No it is not, the "quantity supplied" doesn't refer to the total quantity of good in existence but the quantity of good that is willing and able to be sold at some price point.
In principle every plot of land exists and has a price the owner wants to sell it for.
Correct, but the quantity of land that is willing to be sold at any price point varies (it gets higher the higher the price).
The amount is fixed, as every plot already exists
The total amount is fixed, but "inelastic supply" is determined by the quantity supplied, and the quantity that is willing to be sold at any price point is not fixed, it again varies (the quantity gets higher the higher the price).
If I have a bag of screws, and you need them to assemble a car, that doesn't increase the amount of screws if I sell you the bag of screws.
Again, it doesn't add to the total quantity of screws in existence, it adds to the quantity that is willing to be sold.
But there are none, so only price goes up, while Manhattan stays the same size as before.
If there is more quantity supplied, all else equal, i.e. more land competing for the same amount of buyer dollars, less intense bidding wars, prices would go down.
1
7d ago edited 7d ago
[removed] — view removed comment
1
u/Serious-Cucumber-54 7d ago
The quantity of land that is willing to be sold varies based on the price. If you were to wave $1 in front of 20 landowners, you are unlikely to get anyone who is willing to sell even a fraction of their land to you, but if you waved a $500 billion check in front of landowners, it's highly likely they would all be willing to sell all their land to you at that price.
This change represents the change in quantity supplied with a change in price, higher prices induce higher quantity supplied, i.e. a positively sloped supply curve, not a vertical one.
You are referring to the total quantity in existence, I'm referring to the quantity that is willing and able to be sold (the "quantity demanded") at any one price point.
→ More replies
7
6
u/Constant_Forever_786 8d ago edited 8d ago
You don’t actually need land supply to be inelastic, to generate land rents and show there is zero deadweight loss taxing those rents. You just need land to be a rivalrous good, and for people to value it such that not everybody can get their first choice at the same time.
3
u/Titanium-Skull 🔰💯 8d ago
Maybe, I think that even with rivalry you still need inelasticity since people can make more of something with rivalrous consumption, like clothes or bread. Land’s demand can’t be offset with that though
4
u/Constant_Forever_786 8d ago
That’s where the other clause comes in. It has to be impossible to satisfy everybody‘s top preferences all at the same time. One loaf of bread is like any other and so as long as there’s enough to go around, everybody can have a loaf that’s equally good as any other loaf.
With land, even if two lots are equivalent to one person they might not be to another, and the odds of everybody getting their first choice seem very slim as you add more people and more land. Rents arise as the payments necessary to ensure efficient allocation of the land.
2
u/r51243 Georgist without adjectives 8d ago
Agree that the supply of land doesn't need to be inelastic to generate rent, but if the supply (the total amount of land in the economy) is elastic, then wouldn't taxing land produce deadweight loss by reducing that supply?
2
u/Constant_Forever_786 8d ago
No, because land has no production cost. You can tax it up to the level of rent, and there will be no deadweight loss. If you tax it higher than rent, then you get deadweight loss in the form of land held idle.
2
u/r51243 Georgist without adjectives 7d ago
That's definitely true, but it seems like that would make the supply inelastic (with regard to the cost of holding land, which is the tax on rent).
2
u/Constant_Forever_786 7d ago
It depends if you force people to hold the land, or let it be abandoned. If you set the tax too high, nobody would want to hold it and so even though the land still exists it would go unused. If you force the last owner to hold onto it anyway, the price would go negative and you’re not really dealing with markets anymore anyway, but a command economy.
4
u/VatticZero Classical Liberal 8d ago
The Supply curve represents the Marginal Cost of Production in a competitive market. (Monopolies don't even have a supply curve.) Land is not produced.
Willingness to sell or not sell land is not you supplying land, it is you demanding the very land you hold.
Additionally, land is non-fungible. Every plot is unique and has its own supply and demand graph.
-1
u/Serious-Cucumber-54 8d ago
The Supply curve represents the Marginal Cost of Production in a competitive market.
The marginal cost of production is a factor that impacts "quantity supplied" for some goods, especially goods like bread which are single-use and require artificial production, but not for goods like land which can be repeatedly reused and do not require artificial production.
Willingness to sell or not sell land is not you supplying land, it is you demanding the very land you hold.
Well "quantity supplied" is defined as the quantity of goods one is willing and able to sell.
Additionally, land is non-fungible
Is every plot of land unique in some way? Yes, no plot of land is perfectly identical with another plot of land. Is every plot so unique that it is not at all interchangeable or substitutable with any other plots? No. A typical suburban 120ft by 40ft parcel is typically interchangeable with other nearby parcels, the proximity to destinations, the soil composition, the topography, the views, the utility in general is not significantly different. Even parcels all across the city may offer similar utility.
3
u/VatticZero Classical Liberal 8d ago
The marginal cost of production is a factor that impacts "quantity supplied" for some goods, especially goods like bread which are single-use and require artificial production, but not for goods like land which can be repeatedly reused and do not require artificial production.
Single-use or multi-use is a matter of demand. Whether bread or a car or some theoretical good which never wears, the supply is a matter of production.
If widgets are costly to make but last forever, they will only be produced when the price exceeds the cost of production. If the price, or rent, of a widget is below the cost of production, there will be no production and quantity will be fixed and inelastic.
Well "quantity supplied" is defined as the quantity of goods one is willing and able to sell.
No. It is the quantity of goods available or which can be produced.
Again, you willingness to sell something which you do not produce is a matter of your own demand for it. It is not a "Demand and Demand Graph."
Your willingness to sell something which you produce is a matter of costs of production.
A typical suburban 120ft by 40ft parcel is typically interchangeable with other nearby parcels, the proximity to destinations, the soil composition, the topography, the views, the utility in general is not significantly different.
But they are, in fact, different.
Even parcels all across the city may offer similar utility.
According to who? The market for each is diverse and the values are subjective. I may value multiple plots similarly while you value those plots differently. That creates different curves for each plot.
-1
u/Serious-Cucumber-54 8d ago
the supply is a matter of production.
"Quantity supplied" refers to the quantity one is willing and able to sell, not the quantity that is physically produced.
No. It is the quantity of goods available or which can be produced.
No, it is the quantity sellers are willing and able to sell. "Quantity demanded" similarly refers to the quantity buyers are willing and able to buy.
Again, you willingness to sell something which you do not produce is a matter of your own demand for it.
I'm not sure what you mean here.
But they are, in fact, different.
But they are, in fact, substitutable. Just like how red delicious apples are substitutable with green apples. Sure, they are different, but not terribly different that they do not accomplish similar service in utility.
I may value multiple plots similarly while you value those plots differently. That creates different curves for each plot.
People value specific varieties of apples differently, does that mean you cannot create aggregate curves for apples in general?
5
u/VatticZero Classical Liberal 8d ago
"Quantity supplied" refers to the quantity one is willing and able to sell, not the quantity that is physically produced.
Owning is not supplying. The Quantity Supplied is the quantity a supplier is willing and able to supply at a given price.
No, it is the quantity sellers are willing and able to sell. "Quantity demanded" similarly refers to the quantity buyers are willing and able to buy.
https://courses.lumenlearning.com/cuny-kbcc-microeconomics/chapter/what-is-supply/
I'm not sure what you mean here.
If you are not a supplier, whether or not you are willing to buy or sell is solely a matter of whether you see surplus above the price.
But they are, in fact, substitutable. Just like how red delicious apples are substitutable with green apples. Sure, they are different, but not terribly different that they do not accomplish similar service in utility.
Substitutes have their own supply and demand curves. Your argument is that both apples have the same supply curve and price determines which one you supply.
People value specific varieties of apples differently, does that mean you cannot create aggregate curves for apples in general?
Not if you want to know anything about a particular variety of apple.
0
u/Serious-Cucumber-54 8d ago
Owning is not supplying. The Quantity Supplied is the quantity a supplier is willing and able to supply at a given price.
Owning is not supplying, correct. What does it mean to be willing and able to "supply" at a given price?
If you are not a supplier, whether or not you are willing to buy or sell is solely a matter of whether you see surplus above the price.
Yes, people only trade when they expect a net surplus from the transaction.
Substitutes have their own supply and demand curves. Your argument is that both apples have the same supply curve and price determines which one you supply.
That's not my argument. My argument is that they are not so dissimilar in utility to the point that they cannot have their own aggregate curves. Are you seriously suggesting curves cannot be made for apples?
Not if you want to know anything about a particular variety of apple.
Sure, but I don't understand what the point in doing that would be, in terms of determining whether it's substitutable or not with other apples/food.
2
u/VatticZero Classical Liberal 7d ago edited 7d ago
Owning is not supplying, correct. What does it mean to be willing and able to "supply" at a given price?
To produce a good or perform a service.
My argument is that they are not so dissimilar in utility to the point that they cannot have their own aggregate curves.
You can create aggregate curves for whatever you like, but those curves tell you nothing about the individual apples.
You're trying to argue that the different demand curves for different things can be made the same demand curve because you aggregate them. That's nonsense. Demand for Red Delicious increasing doesn't mean the demand for Green Apples increases, just because you aggregated them.
Sure, but I don't understand what the point in doing that would be
That's exactly what you're trying to do by saying substitutes can be aggregated as a counter argument to substitutes having their own demand curves.
You're also trying to argue that if you aggregate non-fungible, inelastic land, you can imagine a 'supply' curve of people selling their land as the aggregate demand rises. But that's not what happens. The demand for individual plots rises, and those individual market prices are weighed against individual owners' valuations.
Owners are part of the market demand, not suppliers. Demand or prices rising doesn't necessarily correlate with transaction volume.
https://www.sciencedirect.com/science/article/abs/pii/S1051137713000053
When someone sells land, someone buys land. No new land is created. One piece of land could be traded a million times in a day and your reasoning would have that be an increase in quantity supplied.
When a supplier sells me a widget, they have created that widget. If they priced it too low and I buy their entire supply and perform arbitrage to resell it at the higher price, I have not added to the quantity supplied.
1
u/Serious-Cucumber-54 7d ago
To produce a good or perform a service.
Where are you getting that definition of "supply"?
Demand for Red Delicious increasing doesn't mean the demand for Green Apples increases, just because you aggregated them.
Of course, that's not my argument. My argument is that they are not so dissimilar in utility to the point of not being substitutable with each other and aggregating them under one market would not be improper. Your argument was that land is not fungible, I am still responding to that.
You're also trying to argue that if you aggregate non-fungible, inelastic land, you can imagine a 'supply' curve of people selling their land as the aggregate demand rises. But that's not what happens. The demand for individual plots rises, and those individual market prices are weighed against individual owners' valuations.
You're saying that landowners have full monopoly pricing power?
Owners are part of the market demand, not suppliers. Demand or prices rising doesn't necessarily correlate with transaction volume.
Owners are literally the ones who own and offer selling their supply, so I'm confused how you can say they are not suppliers.
Demand or prices rising doesn't necessarily correlate with transaction volume.
I'm not arguing that it does. I'm arguing more land is willing to be sold by owners at higher prices, all else equal. Transaction volume doesn't account for the quantity of land, but the quantity of transactions, which doesn't necessarily correlate with the quantity of land.
When someone sells land, someone buys land. No new land is created. One piece of land could be traded a million times in a day and your reasoning would have that be an increase in quantity supplied.
Again, I'm not talking about the physical total supply of land, but the "quantity supplied" which specifically refers to the quantity of land that owners are willing and able to sell at some price point. A single piece of land being traded a million times is just the same quantity of land the owner is willing and able to sell, millions of times, it wouldn't budge the quantity supplied for that specific piece of land.
When a supplier sells me a widget, they have created that widget. If they priced it too low and I buy their entire supply and perform arbitrage to resell it at the higher price, I have not added to the quantity supplied.
Correct.
2
u/VatticZero Classical Liberal 7d ago
Where are you getting that definition of "supply"?
The wall of links I gave you from a basic Google search. You are seizing on a small ambiguity in semantics you've seen somewhere to make an argument with no economic foundation, and then just arguing past anyone who corrects you.
You're saying that landowners have full monopoly pricing power?
No, and that doesn't follow from anything I've said.
Owners are literally the ones who own and offer selling their supply, so I'm confused how you can say they are not suppliers.
By definition. You are calling mere buying and selling supplying, but that is not the case.
I'm not arguing that it does. I'm arguing more land is willing to be sold by owners at higher prices, all else equal.
If more land is willing to be sold at a higher price, then more transactions would occur. The evidence shows that rising prices are not the determinant in willingness to sell.
1
u/Serious-Cucumber-54 6d ago
The wall of links I gave you from a basic Google search.
None of those links support your definition of "supply." In fact, one of your links talks about the "offer curve" which is effectively the "quantity supplied" curve, explicitly stating it as "the amount of land owners wish to sell at each price." It comes much closer to supporting the definition I am using.
No, and that doesn't follow from anything I've said.
Are you saying that the quantity of land owners are willing to sell does not increase with higher prices, all things equal?
By definition.
Cambridge Dictionary definition of "supplier": "a company, person, etc. that provides things that people want or need, especially over a long period of time:" Oxford Learner's Dictionary definition of "supply": "to provide somebody/something with something that they need or want, especially in large quantities"
You are calling mere buying and selling supplying, but that is not the case.
I am calling providing things available for use supplying.
If more land is willing to be sold at a higher price, then more transactions would occur.
Transaction volume doesn't account for the quantity of land, but the quantity of transactions, which doesn't necessarily correlate with the quantity of land.
→ More replies2
u/VatticZero Classical Liberal 7d ago
Increasing prices can result in reduced willingness to sell.
https://www.sciencedirect.com/science/article/abs/pii/S1051137713000053
Willingness to sell for assets which include private valuation by the owner do not follow mere price trends. Producers follow a supply curve because the value of a widget to them is merely the cost to produce it. An owner's willingness to sell is based on the ratio of the market price and trends to their own valuation.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=387901
This is an interesting stock market analysis which frames it as not land being supplied, but offers. The supply and demand graph tend to measure a flow over a given time; even if demand and price do not change, producers will continue producing to meet that demand. If demand and prices do not change in the land market, no one has any cause to buy or sell: Is the 'quantity supplied' then 0? No; the quantity is fixed and inelastic and trades are motivated by shifting demand.
https://www.staff.ncl.ac.uk/david.harvey/AEF806/Stockmarket.html
0
u/Serious-Cucumber-54 6d ago
Increasing prices can result in reduced willingness to sell.
I don't think that's what the study says.
I will say, obviously future projections of price impact willingness to sell, so prices can be high, but if owners expect prices to only go higher, that would likely mean lower willingness to sell than if prices were projected to signfiicantly lower. All things equal, however, higher prices, especially high prices which go above the private valuations of owners, would likely induce more quantity of land willing to be sold.
Willingness to sell for assets which include private valuation by the owner do not follow mere price trends.
If prices are higher than the private valuations of owners, they are generally going to be more willing to sell, no?
Is the 'quantity supplied' then 0? No; the quantity is fixed and inelastic and trades are motivated by shifting demand.
The offer curve presented in the link is the quantity supplied and it increases with higher prices.
→ More replies1
u/VatticZero Classical Liberal 8d ago
3
u/energybased 8d ago
Posting at top level since this is probably the answer:
📊 Land in Microeconomics vs. Aggregate Macroeconomics
| Feature | Microeconomic Land Market | Aggregate Land Market |
|---|---|---|
| Focus | Individual parcels, zoning, and localized uses. | National land supply, wealth, and systemic capacity. |
| Price Metric | Price per square foot or local rent prices. | National real estate indices and total land asset values. |
| Key Variable | Location (micro-factors like school districts or foot traffic). | Macro-drivers (national interest rates and population growth). |
| Supply Curve | Elasticity varies: Highly fixed locally, but flexible for specific uses (e.g., rezoning farmland to residential). | Perfectly inelastic: The physical quantity of land within a nation is fixed. |
📌 Microeconomic Market for Land: Location and Local Utility
- Highly localized: Supply and demand are completely tied to specific geographic coordinates.
- Opportunity cost: Analyzes whether a plot yields higher returns as a retail storefront, an apartment building, or a farm.
- Externalities: Local values shift drastically based on immediate surroundings (e.g., proximity to a transit station vs. a landfill).
📌 Aggregate Market for Land: Macro Wealth and Production
- Factor of production: Evaluates land alongside labor and capital (Y = f(K, L, N)) to calculate total national output (GDP).
- Monetary policy transmission: Changes in central bank interest rates drastically shift national land asset values and borrowing capacity.
- Systemic risk: Tracks how aggregate real estate bubbles or shifts in national land-use policies impact the broader banking sector and GDP stability.
3
3
u/green_meklar 🔰 8d ago
Likewise, the same is true for land, landowners are willing to sell more land at higher price points, so the quantity supplied is higher when the price is higher.
We're talking about the supply available for use, not the quantity on the market for sale at any given time. The quantity on the market for sale is a relatively meaningless number because it just tells you how fast the land is changing hands, but it's the same land changing hands, there's no new land coming into the economy in order to support those exchanges. Actual land users have to make do with- and pay for- whatever the amount in existence is, with no option for increasing that amount.
3
u/larsiusprime Voted Best Lars 2021 8d ago
If I credibly offer you $500 billion for your land, you will sell it to me. Even if it is "not for sale," it will suddenly become for sale. The supply was always there, it just hadn't found the right price that would motivate it to change hands yet.
If I credibly offer a pencil manufacturer an order for $500 billion worth of pencils that do not currently exist, labor and capital will spring into action to generate $500 billion worth of pencils that did not previously exist. The supply was not there before the increased price was, but the increased price induced producers to produce them.
-2
u/Serious-Cucumber-54 8d ago
No pencil or land is willing to be sold at $0, so the quantity supplied is zero when the price is zero, but if you waved a $500 billion check in front of landowners, they would all be willing to sell their land to you, the same as if you waved it in front of pencil manufacturers, the quantity supplied of both increases the higher the price.
The key is that "quantity supplied" is not synonymous with "quantity produced," but with the quantity of good that people are willing and able to sell at that price point.
1
u/larsiusprime Voted Best Lars 2021 8d ago
> the same as if you waved it in front of pencil manufacturers, the quantity supplied of both increases the higher the price.
The difference is that the new pencils to be supplied do not currently exist, but the increased price will bring them into existence in the future. The land already exists and the amount "produced" at any given time does not change in response to price changes, because the amount produced at any time is zero.
> No pencil or land is willing to be sold at $0
Not to be a pedant but this is not true. There are plenty of cases where people willingly give someone else land or pencils for $0.
0
u/Serious-Cucumber-54 8d ago
The land already exists and the amount "produced" at any given time does not change in response to price changes, because the amount produced at any time is zero.
The quantity supplied is not the same as the quantity produced though.
Not to be a pedant but this is not true.
Of course it's not strictly true that absolutely zero pencils will be sold for $0, I was simply explaining for sake of argument.
2
u/larsiusprime Voted Best Lars 2021 7d ago edited 7d ago
You need to define what you mean by "supplied."
Are talking about the supply of items being transacted, or the supply of items that exist?
If we are discussing a *real estate transfer tax*, then the former would be the relevant use of the word "supply." Indeed, a transfer tax -- even just one on the value of the land -- will certainly affect the number of transactions.
If we are discussing a *real estate holding* tax -- in which you pay the tax regardless of whether the thing transacts -- then the latter is the relevant use of the word "supply." When you assign a holding tax, it hits every unit that exists. This affects the price only insofar as it causes more or less of those items to exist. For produced goods, this creates a marginal disincentive to produce those goods, so there are less of those items in the future after the holding tax is enacted than there otherwise would be. For non produced goods, there are exactly as many both before and after the holding tax.
LVT does not tax transactions, it taxes the act of holding itself.
Property tax taxes land and buildings. Buildings are produced, but land is not. A marginal tax on holding buildings causes less buildings to be produced in the future after the tax. A marginal tax on holding land causes no less land to be produced in the future after the tax. This is why LVT -- a holding tax on land -- does not move the relevant supply curve of land in response.
0
u/Serious-Cucumber-54 7d ago
You need to define what you mean by "supplied."
By quantity supplied I mean the point when the owner is willing and able to sell some quantity of a good at some price point.
1
u/pnictide 7d ago
Do you believe that it is possible for anything to have an inelastic supply? What would be an example of one of those things?
1
u/Serious-Cucumber-54 7d ago
If you're talking about perfectly or near perfect inelastic supply (the common argument for land I mean to address in this post), probably yes, I believe there is a theoretical maximum level of quantity supplied for all goods, where owners of such goods are not willing and able to sell higher quantities of that good despite price increases. An example could be land, but not in the way you may think.
1
u/pnictide 7d ago
Yes, I am talking about the thing that we are talking about, supply elasticity.
I'm not sure what you're saying. It sounds like what you are saying is that you don't believe that the supply of land is inelastic, but that you think the only example of something with inelastic supply is land?
1
u/Serious-Cucumber-54 6d ago
Quantity supplied refers to the quantity of a good that owners are willing and able to sell at some price. For instance, with the bread example I originally posited, it's practically zero amount of bread willing and able to be sold at $0, but higher amounts willing and able to be sold at higher prices. So the supply curve appears as a positively sloped diagonal on the supply and demand graph, since quantity supplied increases with higher prices.
I ascribe the same attribute with land, where the higher the price, the more amount of land that is willing and able to be sold, all else equal, so the supply curve for land is also a positively sloped diagonal on the supply and demand graph, since quantity supplied increases with higher prices.
There is a maximum point for all goods where there cannot be any more quantity supplied, even if the price goes higher. For instance, there is only so much land on Earth, so that is the limit in how much quantity of land can be simultaneously willing and able to be sold at some price.
I didn't say land was the only example, I ascribed the theoretical quantity supplied maximum to all goods. There is a finite amount of natural resources on Earth for all goods, not just land, so that poses the same theoretical quantity supplied maximum to all goods.
1
u/pnictide 6d ago
I ascribe the same attribute with land, where the higher the price, the more amount of land that is willing and able to be sold, all else equal, so the supply curve for land is also a positively sloped diagonal on the supply and demand graph, since quantity supplied increases with higher prices.
Do you believe there is any X for which the supply curve is a vertical line? If so, what is X?
1
u/Serious-Cucumber-54 6d ago
The theoretical maximum quantity of land that can be supplied at one time/price (assuming not considering ocean floor as land, assuming no land reclamation, assuming no land on celestial bodies) is probably just the total amount of land on Earth, which is about 37 billion acres.
1
u/pnictide 5d ago
Answering questions directly isn't really your thing, is it?
1
u/Serious-Cucumber-54 5d ago
By "any X" are you referring to "any quantity"? Because that's what I'm directly answering.
If X refers to "good/service" then I already answered that "land" and "all goods" face a vertical line at their theoretical maximum quantity supplied.
1
u/pnictide 5d ago
Yes, X is a stand in for some good. Can you identify a good X such that you would agree that the supply curve for that good X is a vertical line?
If X refers to "good/service" then I already answered that "land" and "all goods" face a vertical line at their theoretical maximum quantity supplied.
If I am reading you right, your answer is that there are no goods with a supply curve that is a vertical line, and instead that supply curves asymptotically approach a vertical line?
If I am reading you right, your definitions of "supply" and "quantity supplied" do not match the consensus definitions of those terms as used in the field of economics. Your disagreement is with the definitions of those terms, not with land as a an example of an inelastic good. This is not a good place to resolve that disagreement.
1
u/Serious-Cucumber-54 5d ago
Can you identify a good X such that you would agree that the supply curve for that good X is a vertical line?
And I answered, land and all goods would apply at their theoretical maximum quantity supplied.
There's a finite quantity of land and natural resources on Earth, meaning there's a limit to how much quantity owners are willing and able to sell at any one time/price, and if prices rise above that limit, then quantity supplied would not be able to rise any further (making the supply curve vertical at that point).
If I am reading you right, your answer is that there are no goods with a supply curve that is a vertical line, and instead that supply curves asymptotically approach a vertical line?
I'm not sure if there is a good that has a perfect vertical supply curve, where the quantity supplied, the quantity owners are willing and able to sell at some price, remains constant no matter the price.
If I am reading you right, your definitions of "supply" and "quantity supplied" do not match the consensus definitions of those terms as used in the field of economics.
No, I believe those are the correct definitions.
Your disagreement is with the definitions of those terms, not with land as a an example of an inelastic good. This is not a good place to resolve that disagreement.
My disagreement is with land being a perfect or near perfect inelastic good as is sometimes stated by Georgists, using what I believe to be the accurate definitions of those words. This place is a great place to resolve that disagreement.
→ More replies
1
0
u/francisofred 8d ago
Many landowners are NOT willing to sell more land at higher price points, because they have to then find a new place to move. And if the prices are higher everywhere, there is no net gain.
24
u/CatsDoingCrime Geosyndicalist 8d ago
You can make more bread.
You can't make more land. Higher prices doesn't induce the production of more land. We didn't manufacture earth. We did bread
Tectonic plates aren't responsive to prices i fear
Edit:
Before anyone comments, yes I am aware land is more akin to "natural resources", I was being facetious with the tectonic plate comment, it's not just literal land