Special Characteristics Of Land As A Factor Of Production
In ordinary language, land means the surface of the earth or soil. But in Economics, land includes not only the surface of the earth but also other elements like forests, climate, rainfall, rivers, oceans, mines, deserts, minerals etc. In fact, land includes almost all the free gifts of nature.There are some special characteristics of land as a factor of production, and it is fully different from other factors of production.
Peculiarities or Characteristics of land : Land differs from other factors of production. It possesses several unique peculiarities or special characteristics as a factor of production which are mentioned below :
Special Characteristics Of Land As A Factor Of Production
1. Free gift of nature : Land is considered as a free gift of nature. No one has produced it. So, it has no Cost of production.
2. Inelasticity : Land is inelastic in supply. No one can change its supply. Its supply can neither be reduced nor raised according to the changes in its demand. As its supply is fixed and inelastic, its price is determined by the changes in demand.
3. Indestructibility: Land cannot be destroyed on permanent basis. It remains as permanent as a Mountain. No one can destroy it. As it is permanent and indestructible, people like to purchase more hectares of land. Natural calamities like floods, cyclones, famines etc. can’t completely destroy the physical appearance of land. Hence land is described as permanent and indestructible factor.
4. Immobility : Land has no mobility. It is not possible to move a piece of land from one place to the other. This is the main difference between land and other factors of production.
5. Heterogeneity : Land is heterogeneous in nature. No two pieces of land will have the same qualities. Land differs in its fertility and soil.
6. Applicability of law of Diminishing Returns : The law of Diminishing Returns is applicable to land. This law states that more and more doses of labor and capital applied on land after a particular stage brings a less than proportionate increase in the output.
7. Productivity : Land is productive. If we make efforts on land by employing laborers and capital, the productivity of land can be increased. Land itself is not useful to man either for agricultural or industrial purposes.
Significance of Land In Economics
Land is the main basis o f production of goods. It i very difficult to produce goods in the absence of land. Economic development of a country depends on the nature and qualities of land. If the land existing in a country is more fertile, it yields more output. In fact, it is impossible to make production without land. Hence, land is the main factor of production.
