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Economics miscellaneous

  1. Any factor of production can earn economic-rent, when its supply will be
    1. Perfectly elastic
    2. Perfectly inelastic
    3. Elastic in nature
    4. All of the above
Correct Option: B

Economic rent is the revenue that can be earned from the land or other natural resource for which there is a fixed supply — as economists like to say, the supply is perfectly inelastic. Because the supply is perfectly inelastic, the amount of its supply does not depend on any income that the resource can produce.



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