Other things being equal, an increase in the demand for land in the short-run will cause an increase in the

1. Analyze the question The question asks what happens when demand for land rises in the short run, other things being equal. Land is a factor of production, so we apply demand and supply analysis to a factor market.

2. Explain the concept

• In the short run, the supply of land is considered fixed (perfectly inelastic). Land is a gift of nature, and its total quantity cannot quickly be increased.
• The supply curve for land is therefore a vertical line.
• When demand shifts to the right, the new equilibrium sits higher on the same vertical supply curve.

3. Step-by-step solution

• Initially, demand D₁ meets the vertical supply curve S at price P₁.
• Demand increases, so the curve shifts to D₂.
• D₂ meets the same vertical supply curve at a higher price P₂.
• The quantity of land stays the same. Supply does not change, and quantity supplied does not change either, because the curve is vertical.
• The only thing that rises is the price (the rent or the price of land).

Checking the options:

• A. Price only: correct, because price rises while quantity stays fixed.
• B. Price and supply: wrong, since supply does not change.
• C. Quantity supplied only: wrong, since quantity supplied cannot rise on a fixed supply.
• D. Supply only: wrong, since supply is fixed in the short run.

4. Answer The correct option is A. price only.

5. Exam tip When you see "land" and "short run" together, think vertical supply curve. Any change in demand then affects price only, never quantity. Economists describe this as the economic rent being demand-determined.