Alpen Inc.is a manufacturing firm that holds the patent for a new food processing machine that is considerably safer and more efficient than the others available in the market.Being the only firm that manufactures this product,Alpen charges a very high price for it.This is referred to as _____.
A) monopoly rent
B) technology lag
C) incumbent inertia
D) absorptive capacity

Question

Quizplus · Accepted Answer

Monopoly rent refers to the extra profits earned by a firm due to having a monopoly in the market, as they can charge a higher price for their product without facing competition from other firms. Alpen Inc. is the only firm that manufactures the safer and more efficient food processing machine and charges a high price for it, making it an example of monopoly rent. Technology lag, incumbent inertia, and absorptive capacity are not relevant in this context.

Alpen Incis a Manufacturing Firm That Holds the Patent for a a New