If someone earned $25 million a year acting on a sitcom,the chances are that _____ of that $25 million would be economic rent.

Question

Quizplus · Accepted Answer

The economic rent is the portion of income above what is necessary to keep a factor of production in its current use. In the case of an actor earning $25 million a year, it is likely that a large part of that income is economic rent, since it is unlikely that the actor's skills and talent are only worth $25 million to the industry. The high demand for the actor's services may allow them to negotiate a higher salary, resulting in a significant portion of their income being classified as economic rent.

If Someone Earned $25 Million a Year Acting on a Sitcom,the