Choose the statement that best describes the difference between "economic rent" and other factor payments.
A)Economic rent is unearned income of the factor whereas other payments are earned.
B)Economic rent is not a cost to the firm but other payments are.
C)A reduction in economic rent will not reduce the availability of the factor whereas reducing other payments of factors will reduce their availability.
D)There is no difference between economic rent and other factor payments.
E)Economic rent is the sum of all factor payments.

Question

Quizplus · Accepted Answer

Economic rent is the extra payment made to a factor of production over what is necessary to keep it in its current use. Reducing economic rent does not affect the availability of the factor, unlike reducing other factor payments which could lead to a decrease in supply.

Choose the Statement That Best Describes the Difference Between "Economic