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Unformatted text preview: • Why does the value of paintings rise after an artist dies? Cause you can’t get any more. Fixed supply of paintings. Notion of Economic Rent • Payment in excess of amount necessary to bring forth a supply • Pure ‘windfall’ gain • Efficient to tax this gain Origin of ‘Rent’ • Land is fixed in inelastic supply • If more valuable use of land exists, landowners collect more rent Demand Perspective • Whose demand for coffee is inelastic? •...
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This note was uploaded on 04/30/2008 for the course ECON 200 taught by Professor Park during the Spring '08 term at American.
- Spring '08
- Price Elasticity