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Microeconomics II
book

Microeconomics II

by D.N. Dwivedi
August 2011
Intermediate to advanced content levelIntermediate to advanced
368 pages
14h 51m
English
Pearson India
Content preview from Microeconomics II
214 Chapter 9
than OP
3
. at is, minimum payment that must be made to all but the last factor unit, in order
to prevent the transfer of factors to alternative uses, is less than the equilibrium price OP
3
. In
other words, the transfer earning of all factor units, excepting the last one, is less than their
actual earning. For example, the transfer earning of OKth unit of factors is only OP
2
whereas the
actual earning, i.e., the market factor price, is OP
3
. us, economic rent earned by the OK units
is OP
3
OP
2
P
2
O
3
. e same exercise may be performed for all the ON factor units to compute
their economic rent. e shaded area, P
1
P
2
P
3
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Publisher Resources

ISBN: 9788131797655