To Say That Land Rent Performs No Incentive Function Means

question 231

Multiple Choice

To say that land rent performs no incentive function means that

• A)higher rental payments will not bring forth a larger quantity of land.
• B)rent is not a cost to specific firms, but it is a cost from the standpoint of the economy as a whole.
• C)rent does not allocate land in terms of productive efficiency.
• D)rent tends to allocate land into the most productive uses.

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Definitions:

Contribution Margin Ratio

A financial indicator that measures how a product's selling price exceeds its variable costs, expressed as a percentage.

Revenue Remaining

The amount of income that remains after subtracting costs and expenses from the total revenue.

Relevant Range

The span within which the assumptions about fixed and variable cost behaviors are valid.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.