Which of the following would be expected to produce an economic rent?

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Economic rent is a payment made for accessing a non-reproducible resource or commodity, such as a patent or the fountain of youth. The new pizzeria in Little Italy would not generate economic rent as it can be replicated by competitors. Therefore, both A and C would be expected to produce economic rent. An economic rent is a payment to a factor of production (such as a resource, service or skill) that is in limited supply and in high demand, resulting in the factor earning more than the minimum amount necessary to keep it in its current use. In the given options, a patent on a drug that will cure AIDs and the fountain of youth both represent factors of production that are in limited supply and in high demand, and thus, can be expected to produce an economic rent. The new pizzeria, on the other hand, is not a factor of production in limited supply and therefore, would not produce an economic rent.

Which of the Following Would Be Expected to Produce an Economic