Consider two resource markets in which the demand curves slope downward.In market A,the supply curve is horizontal,equilibrium price is $10,and 90 units of the resource are hired.In market B,the supply curve is vertical,equilibrium price is $30,and 40 units of the resource are hired.Which of the following is correct?
A) In market A,total earnings = $900,economic rent = $450,opportunity cost = $450
B) In market A,total earnings = $900,economic rent = $0,opportunity cost = $900
C) In market A,total earnings = $900,economic rent = $900,opportunity cost = $0
D) In market B,total earnings = $1,200,economic rent = $300,opportunity cost = $900
E) In market B,total earnings = $1,200,economic rent = $0,opportunity cost = $1,200

Question

Quizplus · Accepted Answer

The Answer of Consider two resource markets in which the demand curves slope downward.In market A,the supply curve is horizontal,equilibrium price is $10,and 90 units of the resource are hired.In market B,the supply curve is vertical,equilibrium price is $30,and 40 units of the resource are hired.Which of the following is correct?
A) In market A,total earnings = $900,economic rent = $450,opportunity cost = $450
B) In market A,total earnings = $900,economic rent = $0,opportunity cost = $900
C) In market A,total earnings = $900,economic rent = $900,opportunity cost = $0
D) In market B,total earnings = $1,200,economic rent = $300,opportunity cost = $900
E) In market B,total earnings = $1,200,economic rent = $0,opportunity cost = $1,200

Consider Two Resource Markets in Which the Demand Curves Slope