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Land is completely fixed in total supply. No matter how high the rent, no more can be brought into use. Thus rent serves no incentive function; the same amount of land will be available no matter how high the rent. But the resulting argument that rent is a surplus that could be eliminated without reducing the supply is to look at it from the viewpoint of society only.
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Why is demand the sole active determinant of land rent?
Demand is the sole active determinant of land rent because the supply is fixed.
Is rent fixed cost?
yes rent is usally a fixed cost
What is economic rent?
the payment for the right to use land
Is rent a fixed cost?
yes rent is usally a fixed cost
What is modern theory of rent?
Modern Theory of RentThis theory is also known as demand and supply theory of land. It is based on the following assumptions:1. There is always perfect competition among various cultivations.2. The fertility of different lands is same.3. The land is used for a particular job.Explanation of the TheoryThe theory explains the concept of rent in terms of demand and supply. According to the theory rent is payment for the use of land. Demand for the use of land is actually the demand for that product which is produced on it. Demand for the land will increase with increase in demand for that particular product. Since th supply of land is fixed i.e. the supply cannot increase or decrease therefore the rise or fall of rent will be entirely governed by it's demand. Thus on the side of demand rent of land is determined by its productivity not total productivity, but marginal productivity. And for supply, the supply of land in general is absolutely inelastic, as such in supply is independent of what it earns. From the following figure it is clear that the supply of land is fixed SS, while as demand is increasing from DD to D'D' and to D'' to D'', the rent is also increasing from RR to R'R' and to R''R''.ANSWERED BY KISHORBVIMED
How do you calculate economic occupancy for a apartment complex?
Total net income divided by gross potential rent
Does rent increase if property supply exceeds demand?
When rental supply increases the rent decreases.
Is rent an example of an fixed expense?
Yes normally rent is fixed expense and need to be paid even there is no production at all.
Is depreciation a fixed cost?
Yes it is a fixed cost. Reason being that a fixed cost remains unchanged in total as the level of activity increases or decreases. Example of fixed costs include depreciation of plant and equipment, cost of council rates and rent.
What is a fixed cost for a store?
Rent.
What is the fixed cost for a store?
rent.
What does fixed expenses mean?
the word fixed expenses means to rent
