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Vinvika [58]
3 years ago
5

The market for land is competitive and in equilibrium at the rental rate of $500 per acre and the supply of land is perfectly in

elastic at 1000 acres. If the demand for land falls and the rental rate falls to $400 per acre, the total economic rent on this land _____ by _____.
Business
1 answer:
Elina [12.6K]3 years ago
5 0

Answer:

Falls by $100,000

Explanation:

In this question, we are asked to calculate and state what happens when demand for land falls and as a result, there is also a fall in rental rate.

Firstly, we cost the total of 1000 acres. The price of 1000 acres is simply the multiplication of the 1000 acres by the $500 unit price= 500 * 1,000 = $500,000

We now calculate the price or worth of the land when demand falls

This is mathematically equal to 400 * 1000 = $400,000

Now, the net economic rent fall would be $500,00 - $400,000 = $100,000

Hence, there would be a fall of $100,000 as the demand for land falls

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In the given problem cost of machine at which it is purchased is its value, Depreciation is the value of original cost which has been used and amount at which the machine used can be sold is its value.

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What is one example of service that a bank or credit offers
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3 years ago
In February 2018, Brilliant Industries purchased the Topaz Mine at a cost of $10,000,000. The mine is estimated to contain 500,0
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Answer:

B. Depletion will be $950,000 during  2018

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8 0
2 years ago
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Answer:

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6 0
3 years ago
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