Identify the truthfulness of the following statements.
I. Economic rent may equal economic profit.
II. Economic rent may exceed economic profit.

Question

Identify the truthfulness of the following statements. 
I. Economic rent may equal economic profit.
II. Economic rent may exceed economic profit.

Quizplus · Accepted Answer

Economic rent is the surplus earned by a factor of production above what is necessary to keep it in its current use. Economic profit is the total revenue earned minus total costs, including both explicit and implicit costs. Therefore, it is possible for economic rent to equal economic profit (when implicit costs are zero) or to exceed economic profit (when implicit costs are positive). Thus, both statements I and II are true.

Identify the Truthfulness of the Following Statements