Earning Temporary Economic Rent by Raising Prices in Response to Excess Demand
When a seller capitalizes on excess demand by increasing prices, their profit rate goes up. If they were previously making a normal profit at the market equilibrium, this price hike allows them to earn a temporary economic rent, which is a level of profit greater than what is required to maintain their business operations. [9, 10]
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Introduction to Microeconomics Course
CORE Econ
Ch.8 Supply and demand: Markets with many buyers and sellers - The Economy 2.0 Microeconomics @ CORE Econ
The Economy 2.0 Microeconomics @ CORE Econ
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Earning Temporary Economic Rent by Raising Prices in Response to Excess Demand
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Learn After
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