When the supply curve of a resource is vertical, then the return to the resource owner is

Question

Quizplus · Accepted Answer

When the supply curve of a resource is vertical, it means that the resource is fixed in quantity and cannot be increased in response to changes in demand. In this scenario, the resource owner is able to earn pure economic rent, which represents the return above and beyond the opportunity cost of using the resource in its next best alternative use. Therefore, the correct answer is D, pure economic rent.

When the Supply Curve of a Resource Is Vertical, Then