Economic rent refers to the price of a factor of production which is fixed in supply.

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Economic rent is the price paid for the use of a factor of production which is fixed in supply, such as land or certain natural resources. This is because the supply of land or natural resources is limited and cannot be increased in response to changes in demand. This causes the price of these factors of production to be determined by their scarcity, rather than by their marginal cost of production. In contrast, factors of production that can be increased in supply, such as labor or capital, do not generate economic rent, as their price is determined by their marginal cost of production.

Economic Rent Refers to the Price of a Factor of Production