If All the Return to a Resource Is Economic Rent

question 359

Multiple Choice

If all the return to a resource is economic rent, we know that

• A) the price of the resource is below its opportunity cost.
• B) the price of the resource equals its opportunity cost.
• C) the price of the resource is above its opportunity cost.
• D) the resource has no opportunity cost.

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Definitions:

Operating Cost

Expenses associated with the day-to-day functioning of a business, such as rent, utilities, and payroll, excluding manufacturing costs.

Useful Life

The estimated time period that an asset is expected to be used before it is fully depreciated.

Selling Price

The amount of money charged for a product or service, or the sum the consumer must pay to purchase it.

Value-based Pricing

A pricing strategy where the price of a product or service is determined by the perceived value to the customer rather than the cost of production or market prices.