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Which of the statements is/are true? I). The less inelastic is the supply for a factor, the greater is the share of income that is comprised by opportunity cost. II). The less elastic is the supply for a factor, the greater is the share of income that is comprised by economic rent. III). The less inelastic is the demand for a factor, the greater is the share of income that is comprised by economic rent. IV). The less elastic is the demand for a factor, the greater is the share of income that is comprised by opportunity cost.
Correct Answer: A
When the supply is perfectly inelastic, then all of the income is economic rent.