The economic rent analysis does not apply to any factor
A)except land.
B)whose supply curve is vertical.
C)whose supply curve is horizontal.
D)whose quantity supplied is fixed.

Question

Quizplus · Accepted Answer

Economic rent analysis applies to factors whose supply is perfectly inelastic (vertical supply curve) because it is based on the premise that the quantity of the factor cannot be increased regardless of price. When the supply curve is horizontal, it indicates perfect elasticity, meaning the quantity supplied can change significantly with price changes, which contradicts the concept of economic rent that is typically associated with fixed supply, such as land.

The Economic Rent Analysis Does Not Apply to Any Factor