Gooey Flakes is the only ready-to-eat cereal that has chocolate syrup injected into each flake.The machine that injects the syrup into the flakes can do nothing else.Which of the following is true?
A)All of the machine's earnings are economic rent.
B)All of the machine's earnings are opportunity cost.
C)The supply curve for this machine is horizontal.
D)The demand curve for this machine is horizontal.
E)The demand curve for this machine is vertical.

Question

Quizplus · Accepted Answer

The machine's earnings are economic rent because it is specialized for a unique task and has no alternative use, meaning its earnings are above the opportunity cost.

Gooey Flakes Is the Only Ready-To-Eat Cereal That Has Chocolate