Duke is a highly skilled negotiator who could work for many law firms. The law firm that hires Duke is able to collect twice as much revenue per hour of Duke's time than it can for any other negotiator in town. The increased revenue will:
A)be evenly split between Duke and the law firm to maximize surplus.
B)all go to the law firm because the firm bears the risk of running the business.
C)all go to Duke because, if it didn't, another firm could hire Duke away.
D)be split between Duke and the law firm, but how it will be split cannot be determined without more information.

Question

Quizplus · Accepted Answer

Economic rent is bid up to prevent a unique factor from moving to another firm.

Duke Is a Highly Skilled Negotiator Who Could Work for Many