If the supply curve for a factor is perfectly elastic,the payments to the factor are
A)partly economic rent and partly transfer earnings.
B)an unnecessary tax on the factor.
C)wholly economic rent.
D)neither economic rent nor transfer earnings.
E)wholly transfer earnings.

Question

Quizplus · Accepted Answer

When the supply curve for a factor is perfectly elastic, it means that the factor can be supplied at a constant price, and all payments to the factor are considered transfer earnings, as there is no economic rent involved.

If the Supply Curve for a Factor Is Perfectly Elastic,the