Question

Take a look at Figure 21-1. Suppose that Q = 10 acres and P = $2000 per acre. What is the dollar amount of economic rents received during the current period, and why is this amount classified as economic rents?

Short answer

the dollar amount of economic rents is$\$20000$

Step-by-step solution

Given Information

The economic rent is the value paid to the assets to move them in basic words, financial lease implies the maker's overflow which is the distinction between the thing individuals will pay and what they really pay.

Explanation

We know,

Price P is $\$2000$

quantity is$\$10$

Economic rent = P$\times$Q

$$\begin{gathered} \Rightarrow 2000\times 10 \\ =20000 \end{gathered}$$

Hence the dollar amount of economic rents is$\$20000$.