Question

the magnitude of economic rent depend upon the elasticity of supply of that factors explain the statement​

Answer 1

Explanation:

In ecomonic, economic rent is an excess amount of capital gained which is beyond the bascis social or economical calculations. These situations can occur when there is market inefficiencies or irregularity in market trend. Now when there is elasticity of suppy, means the supply is reponding to change in price, then this can lead to some surplus profit or economic rent

Answer 2

Economic rent is a payment to a production factor that is in excess of that factor's supply price. It is dependant on the supply factors.

• In the case of land that is completely unique, having only one use, all of its revenue is economic rent. Since it does not have any alternative usage it can not be transferred to another usage.
• This will stay for an infinite time in that use even though its earnings are zero. It denotes relative demand and supply.
• Economic rent also affects capital. For example,  a computer that is installed in a factory has only one use and can not be moved for other use. This affects the supply.
• Any revenue that it will produce above the operating costs is economic rent or the surplus, as the only option is to leave the system idle, in which case profit will be zero.