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Homework answers / question archive / If the supply of land in Wake County is perfectly inelastic, an increase in the demand for Wake County land will a
If the supply of land in Wake County is perfectly inelastic, an increase in the demand for Wake County land will
a. increase the quantity of land supplied, but have no effect on land prices.
b. increase both land prices and the quantity of land supplied.
c. increase land prices, but have no effect on the quantity of land supplied.
d. decrease land prices.
Correct Option: c. increase land prices, but have no effect on the quantity of land supplied.
Explanation: The Wake County has a perfectly inelastic supply which means that the quantity supplied for land in the Wake County is fixed. Therefore, an increase in demand will increase the land price.
