Economic Rent Can Be Defined As

question 50

Multiple Choice

Economic rent can be defined as:

• A)always the same as economic profit.
• B)the maximum amount that firms would be willing to pay for a fixed input.
• C)the minimum amount that firms actually have to pay for a fixed input.
• D)the difference between the maximum amount that firms would be willing to pay for a fixed input and the minimum amount that firms actually have to pay for that input.

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Definitions:

Idle Capacity

Unused production capability within a manufacturing plant or business operation, often due to lack of demand or inefficiency.

Drop a Product

The decision by a company to cease the production and sale of a particular product.

Rent

A periodic payment made to use a property or piece of equipment owned by another party.

Unavoidable

Refers to events or outcomes that cannot be prevented or avoided.