When a Resource Has a Perfectly Inelastic Supply Curve

question 265

Multiple Choice

When a resource has a perfectly inelastic supply curve

• A) the amount of economic rent for this resource is determined by its supply.
• B) the amount of economic rent for this resource is determined by demand for the resource.
• C) the amount of economic rent for this resource is determined by the government.
• D) there is no economic rent being earned by this resource.

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Definitions:

Standard Cost

A predetermined cost of manufacturing, selling, or operating a product or service.

Price Factor

A multiplier used to adjust prices, often in the context of indexation or currency conversion.

Standard Cost

A preset cost for a product under normal conditions, used as a benchmark against actual costs.

Price Variance

The difference between the actual price paid for a good or service and its expected (budgeted) price.