Economic rent is a surplus payment when viewed by the economy as a whole but a cost of production from the standpoint of individual firms and industries. as the price of land increases, there is an incentive to provide more of the resource. land rents are necessary to the economy to ensure that the land is available for economic use. the supply of land responds to changes in rent, but in order to use the land profitably, revenue must cover the rental payments. the supply of land does not respond to changes in rent, but in order to use the land profitably, revenue must cover the rental payments.
Economic rent is a surplus payment when viewed by the economy as a whole but a cost of production from the standpoint of individual firms and industries. as the price of land increases, there is an incentive to provide more of the resource. land rents are necessary to the economy to ensure that the land is available for economic use. the supply of land responds to changes in rent, but in order to use the land profitably, revenue must cover the rental payments. the supply of land does not respond to changes in rent, but in order to use the land profitably, revenue must cover the rental payments.
Survey of Economics (MindTap Course List)
9th Edition
ISBN:9781305260948
Author:Irvin B. Tucker
Publisher:Irvin B. Tucker
Chapter4: Markets In Action
Section: Chapter Questions
Problem 18SQ
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Economic rent is a surplus payment when viewed by the economy as a whole but a cost of production from the standpoint of individual firms and industries.
as the price of land increases, there is an incentive to provide more of the resource.
land rents are necessary to the economy to ensure that the land is available for economic use.
the supply of land responds to changes in rent, but in order to use the land profitably, revenue must cover the rental payments.
the supply of land does not respond to changes in rent, but in order to use the land profitably, revenue must cover the rental payments.
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