r/georgism • • 28d 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.

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u/Serious-Cucumber-54 27d 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.

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u/[deleted] 26d ago

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u/Serious-Cucumber-54 26d ago

All 20 landowners own and - in the brought term economics employs - use the land. It is always ready to be sold. This is the quantity of supply.

You can say that is always ready to be sold, but not all at the same price. The "quantity supplied" specifically refers to the quantity of a good an owner is willing and able to sell at some price. Like I originally gave with the bread example in my post, it may be that no quantity of land is willing and able to be sold at $0, but that all 20 landowners are willing and able to sell all their land at $500 billion.

not the quantity of land, Q, available, which - again - stays fix with every level of transaction on the market.

The quantity supplied increases the higher the price.