If a factor of production with a fixed supply is earning $100 in its current use and its next best use would yield earnings of $80, the factor is earning a pure economic rent equal to

Question

Quizplus · Accepted Answer

The economic rent is the difference between the earnings of the factor in its current use and its next best use. In this case, the economic rent is $100 - $80 = $20. Therefore, the answer is option B.

If a Factor of Production with a Fixed Supply Is