Think of a contemporary example of economic rent demonstrated in the marketplace

Question

• Think of a contemporary example of economic rent demonstrated in the marketplace. Describe the type of product or service that created the economic rent. What was the product? Why was it introduced (meaning: what problem/niche did it serve)?

• For the same product or service, discuss how long you feel that the firm had a comparative advantage over others? In your discussion with your colleagues, compare and contrast how different markets (e.g., technology vs. manufacturing) may have had an impact on the length of

Explanation / Answer

When the demand for the final product drops, than the D1 curve shifts left to D2 forming a new equilibrium point. Where the new wage rate is 'c' and employemnt level is 'e'.Economic rent: it is any excess payment for a service which is above the minimum amount a t which the person is willing to provide a service.For Ex: if Jane is willing to work for $30,000 per month and receives $35,000 per month, than the economic rent is the excess amount $5000.So in our case the new economic rent is (c-v),

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