The more elastic the supply of a resource,
A)the greater is economic rent as a proportion of total earnings
B)the greater is opportunity cost as a proportion of total earnings
C)the fewer alternative uses the resource has
D)the greater the derived demand for the resource
E)the lower the derived demand for the resource

Question

Quizplus · Accepted Answer

When supply is more elastic, the opportunity cost is a larger proportion of total earnings because the resource can be easily reallocated to other uses, reducing economic rent.

The More Elastic the Supply of a Resource