> Land in desirable locations.
"Desirable" locations is a completely subjective term.
> You can't create more land in the middle of San Francisco
Yes, you can. We call them skyscrapers.
"Desirable" locations is a completely subjective term.
> You can't create more land in the middle of San Francisco
Yes, you can. We call them skyscrapers.
Alright, use "valuable" then. Value is derived from people's desire to purchase the land, which means valuable land is equivalent to desirable land.
> Yes, you can. We call them skyscrapers.
Skyscrapers aren't land.
I'm not entirely sure you're conversing in good faith but I'll do my best to assume you are. Land is a natural monopoly, and the most classic of all. For example, the land surrounding Central Park in New York City is of limited supply. If you want land which borders, say, the west side of Central Park, then there is even less land available.
If someone owns all of the land that borders the west side of Central Park, then no one else can use that land unless they are permitted to by the owner. This means that the owner has a natural monopoly over all land that borders the west side of Central Park. You cannot create more land that borders the west side of Central Park.
Now, if you wanted to live in a house or apartment that borders the west side of Central Park, your only option is to negotiate with the land-owner. They may sell you the land, or rent the land to you (or rent you an apartment or house on that land). If living on the west side of Central Park is something desirable to you, then the land-owner can charge you the absolute maximum price you are willing to pay for living there. You have no alternative, except to not pay at all. If you are willing to pay $1000 a week to live on the west side of Central Park, the land-owner can charge $1000 a week. It is entirely independent of the labour and costs of the land-owner, and entirely based on your willingness to pay.