Asked by David Frigoletto on Jun 16, 2024
Verified
Which statement is true?
A) Stores charge high prices because they have to pay high rents.
B) A firm's demand for land is derived from a firm's MRP curve for land.
C) The supply of land varies from year to year.
D) None of the statements are true.
MRP Curve
The marginal revenue product curve, illustrating the additional revenue generated from employing one more unit of a factor of production.
Firms' Demand
The quantity of goods or services that businesses are willing and able to purchase at a given price level, often influenced by factors like price changes, consumer preferences, and market trends.
- Learn about the roles and viewpoints of entrepreneurs in relation to risk and its influence on profit accumulation.
- Acquire knowledge of how market factors interact to determine the rates of wages, interest, and rents.
Verified Answer
PS
Patrycja SzymikJun 16, 2024
Final Answer :
B
Explanation :
A firm's demand for land is derived from its marginal revenue product (MRP) curve for land, which shows the additional revenue earned from each additional unit of land. The demand for land is based on the productivity of the land and the price the firm can get for the output produced. The other statements are not necessarily true in all cases. Some stores may charge high prices due to high demand or other factors, the supply of land may remain constant in some areas, and rents may be subject to negotiation.
Learning Objectives
- Learn about the roles and viewpoints of entrepreneurs in relation to risk and its influence on profit accumulation.
- Acquire knowledge of how market factors interact to determine the rates of wages, interest, and rents.