Explain why economic rent is a surplus payment when viewed by the economy as a whole but a cost of production from the standpoint of individual firms and industries. Explain: "Land rent performs no 'incentive function' for the overall economy."
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It is the surplus payment that occurs when the price of a resource exceeds its opportunity cost. When viewed by the economy as a whole, economic rent is considered a surplus payment because it represents the additional amount that individuals or firms are Show more…
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