Which of the following would increase the economic rent of a factor, the supply curve of which is perfectly inelastic?

Question

Quizplus · Accepted Answer

An increase in demand would shift the demand curve to the right, leading to an increase in the equilibrium price and quantity of the factor. However, since the supply curve of the factor is perfectly inelastic, the quantity supplied will not change. Therefore, the entire increase in price will result in an increase in economic rent for the factor.

Which of the Following Would Increase the Economic Rent of a Factor