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Consider the market for land in upstate New York, a mostly rural and less populous area, as compared to the market for land in the Upper West Side of New York City, a well-to-do neighborhood alongside Central Park.
Because the supply of land in upstate New York is (perfectly inelastic , perfectly elastic) , buyers in upstate New York pay (an interest rate , an economic rent , an economic profit) when they purchase their land.
Owners realize that the rental price of land is much lower in Upstate New York than in more densely populated areas like the Upper West Side of New York City. One of the possible explanations for this rent difference is that there is a low (demand for , supply of ) land with low productivity.
Some land owners decide to build parking lots in the Upper West Side of New York City. The supply curve for land to be used for parking lots is ( horizontal , vertical , downward sloping , upward sloping ) .
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Consider the market for land in upstate New York, a mostly rural and less populous area, as compared...
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