An Economic Rent Is Created When

question 45

Multiple Choice

An economic rent is created when

• A) organized labor pushes its members' wages above those of unorganized labor.
• B) market forces determine prices and output.
• C) businesses take market prices as given.
• D) laborers accept competitive wages.

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Definitions:

EBIT

A financial metric used to evaluate a company's operating performance by calculating its profit without the effects of financing and tax expenses.

EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization, a measure used to analyze and compare profitability between companies and industries.

Operating Net Cash Flow

The amount of cash generated by a company’s normal business operations over a specific period.

Profitable New Plant

A profitable new plant refers to a newly established manufacturing or production facility that generates earnings in excess of its operating and capital costs.