Which of the following correctly describes economic rent?

Question

Quizplus · Accepted Answer

Economic rent refers to the payment made to an input (such as labor or capital) that is in excess of the minimum amount necessary to retain the input in its present use. It represents a surplus payment that is not required by the input supplier to continue supplying the input, and can result from scarcity, monopoly power, or other factors. Option A is incorrect because it describes the producer surplus, which is different from economic rent. Option C is incorrect because it describes quasi-rent, which is the surplus earned by a firm when it continues to use a durable asset in the short run even though its value has decreased. Option D is incorrect because it describes a lease payment or rent payment, which is a cost to the firm rather than a surplus payment.

Which of the Following Correctly Describes Economic Rent