The concept of economic rent.
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Explanation of Solution
Economic rent refers to the payment for the use of a resource over and above its
For instance, a company wishes to hire a machine for $20, while the supplier of machine has a limited capacity to supply these machines. The seller is willing to sell it for $15. In this case, the machine earns an economic rent of
Introduction:
Economic rent refers to the payment for the use of a resource over and above its opportunity cost. In other words, it is the positive difference between the amount received by a factor of production and the amount of expected payment.
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- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
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