-Refer to the above figure. Suppose demand is D2 and then increases to D3. The change in economic rent is

Question

Quizplus · Accepted Answer

The economic rent is the area above the supply curve but below the demand curve. When demand increases from D2 to D3, the economic rent increases from the area under D2 and above the supply curve to the area under D3 and above the supply curve. The change in economic rent is represented by the area CIHF, which is the additional area covered when moving from demand curve D2 to D3.

-Refer to the Above Figure