Answer to Question #213429 in Microeconomics for Tanya

Question #213429

explain Quasi Rent and Monopolistic exploitation 


1
Expert's answer
2021-07-06T18:13:53-0400

Quasi-rent  is a temporary economic rent like returns to a supplier or owner. It can arise from the barriers to entry that potential competitors face in the short run. It can also arise due to entrepreneurial responses to market fluctuation, or due to a lack of real capital to meet near-term increases in demand.

Monopolistic exploitation arises when marginal revenue is less than price. Marginal revenue product is less than the value of marginal product. When profit maximising firm pays according to marginal revenue product, and labour gets less than the value of marginal product,monopolistic exploitation occurs.



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