The Demand and Supply Curves Shown Below Apply to a Competitive

Multiple Choice

The demand and supply curves shown below apply to a competitive market for a factor used in the production of widgets. FIGURE 13-2
-Refer to Figure 13-2.This factor market is initially in equilibrium at point B.Assume that there is a decrease in the demand for widgets and a new equilibrium is established at point A.Which of the following statements about point A is true?

A) Total economic rent is $120.
B) The marginal revenue product of the 20th unit of the factor is $6 and economic rent of the 20th unit of the factor is $0.
C) The marginal revenue product of the 20th unit of the factor is $120 and economic rent of the 20th unit of the factor is $6.
D) Total transfer earnings are $120.
E) Transfer earnings for the 20th unit of the factor are $6 and economic rent of the 20th unit of the factor is $2.