If a factor of production with a fixed supply is earning $100 in its current use and its next best use would yield earnings of $90, the factor is earning a pure economic rent equal to

Question

Quizplus · Accepted Answer

In this scenario, the factor is earning more in its current use than it would in its next best use. The difference between the two earnings is $10, which is the pure economic rent earned by the factor. Therefore, the answer is option B.

If a Factor of Production with a Fixed Supply Is