The equilibrium rental income paid to landowners at any point in time equals the:

Question

Quizplus · Accepted Answer

The equilibrium rental income paid to landowners is determined by the value of the marginal product of land. This represents the additional revenue generated by using an additional unit of land. Landowners will rent out their land as long as the rental income received is greater than or equal to the opportunity cost of using the land themselves. The marginal product of land represents the additional output produced by using an additional unit of land. Therefore, the equilibrium rental income will equal the value of the marginal product of land.

The Equilibrium Rental Income Paid to Landowners at Any Point