The coefficient of price elasticity of supply of land is usually____________

Step 1: Analyze the question We are asked for the usual value of the price elasticity of supply (PES) of land.

Step 2: Explain the concept PES measures how responsive quantity supplied is to a change in price:

PES = % change in quantity supplied ÷ % change in price

• PES = 0 means perfectly inelastic supply (quantity does not change whatever the price)
• PES < 1 means inelastic supply
• PES = 1 means unitary elasticity
• PES > 1 means elastic supply

Step 3: Apply it to land In economics, land means all natural resources (the physical surface, minerals, forests and so on). The total supply of land is fixed by nature. If the price of land rises, we cannot create more of it, and if the price falls, the total available does not shrink.

So:

• % change in quantity supplied = 0
• PES = 0 ÷ % change in price = 0

The supply curve for land as a whole is therefore a vertical line, which is perfectly inelastic.

Step 4: Check the options

• A. One: this is unitary elasticity, which does not fit land.
• B. Greater than one: this is elastic, which is wrong because land cannot be expanded.
• C. Zero: this is perfectly inelastic, which is correct for the total supply of land.
• D. Less than one: land is inelastic, but "less than one" is not the best description. The usual textbook answer is exactly zero.

Note: The supply of land to a particular use (for example, land for building versus farming) can be somewhat elastic, because land can be switched between uses. The question, however, refers to land in general, so the answer is zero.

Exam tip: Remember "Land = Fixed = Vertical = Zero elasticity." Whenever you see a fixed supply in an elasticity question, think of a vertical supply curve and a coefficient of zero.