Demand for Farmland Is Forcing Higher Prices Interest in buying farmland is growing. Farmland prices are up 5 to 15 percent in the last six months and commodity prices are strong.

a. What is the relationship between strong commodity prices and the price of farmland?
In your answer include a discussion of the demand for and supply of land.

b. Use a graph to show why the price of farmland is rising.

c. Is the supply of farmland perfectly inelastic?