FIGURE 1 DETERMINATION OF RENT
This figure shows how rent is determined when the available supply of land is fixed. The acres of usable land are fixed at L0 (supply S0). If the demand for land is D0, the economic rent is r0 (point a). When demand rises to D1, rent increases to r1 (point b). Notice that because the supply of land in this example is perfectly inelastic, rent depends entirely on demand. If demand were to fall, rent would fall as well.