QUESTION: What is the price elasticity of supply of land in Manhattan? What is the price elasticity of supply for land dedicated to a specific use, such as apartment buildings or office buildings? How do your answers affect the nature of economic rent earned by land owners in Manhattan?

 
Ans   The price elasticity of supply for the land in Manhattan is perfectly inelastic because the supply of land can not be altered it is fixed as it is a natural resource, the supply curve of land will be vertical and its price elasticity will be zero at every price for e.g. in the given table it is mentioned that at price 100$ per acre the supply of land in Manhattan is 1000 acre and when the price rises to 150$ per acre the supply still remains to 1000 acre
 

And Price elasticity of supply = (% Change in Quantity Supplied)/ (% Change in Price)
                                           
                                               = 0/50
                                               = 0

As land is fixed its supply can not be increased so its elasticity is also perfectly inelastic but if we dedicate it to the apartment buildings or office buildings more space can be created so the supply of land will be less inelastic as this will increase the supply in Manhattan

And the economic rent will be lesser for the land owners as the increase in supply will reduce the economic rent of land owners which they could have earned if the supply would have been less