Rent in Economics refers to the price paid for the contribution of land and other free gifts of nature. According to Ricardo, economic rent is the payment made for the use of land only i.e., for the use of the original and indestructible powers of the soil.
According to the Ricardian theory of rent, rent is a surplus, a differential surplus. Difference in fertility and situation of land is the sole cause of the emergence of rent. The excess of production on superior land in comparison to inferior land is differential surplus and it is the rent of the superior land. Marginal land is called no rent land.
According to Ricardo, rent is price determined not priced determining. Ricardian assumptions like original and indestructible powers of the soil, cultivation of only corn in the land, perfect competition, long period, existence of the concept of marginal or no rent land, descending order of cultivation of land, land being subject to the law of diminishing returns and geometrical rate increase of population etc. are subject to criticisms.
According to the modern theory of rent, rent is not the monopoly of land alone. At best it is the leading species of a large genus. Other factors of production like labour, capital and organization can also obtain rent if they have land element of scarcity, specificity and inelastic supply.
From the point of view of the society, rent is price determined. Rent depends on the price of corn. But when land is considered from the point of view of an individual producer, rent enters into price. Rent becomes price determining i.e. rent determines price.