Economic rent is any payment

Question

Quizplus · Accepted Answer

Economic rent is any payment received by the owner of a resource that exceeds its opportunity cost. Opportunity cost refers to the value of the next-best alternative forgone when a choice is made. Therefore, economic rent is a surplus payment received by a resource owner due to factors such as scarcity, monopoly power, or unique skills. Economic rent is not related to the elasticity of supply or the level of profit or return. Option A and B are incorrect as they do not consider the opportunity cost of the resource. Option D is incorrect as economic rent may be higher than a normal profit or return if the resource is scarce or has a unique value.

Economic Rent Is Any Payment