Distinguish between Rent and Price. Does rent enter in to price? Modern economists consider land from the individual point of view. For an individual the supply of land is not inelastic. He buys land to produce something only then rent being a part of cost of production determines price.
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What do you mean by the modern concept of rent? Modern economists are of the opinion that land is inelastic in supply. It has no cost of production thus whole of the return produced, on land goes to rent. As the supply of land is inelastic it yields rent.
The demand and supply side of the modern theory of rent explained. Modern theory of rent is an improvement or modification over the Ricardian theory of rent. Economists like Marshall, Mrs. Joan Robinson and Bounding contributed to the ideas of rent which is called modern theory of rent.
The Circadian theory of Rent explained. David Ricardo, a notable British economist gave his view on the theory of rent which is popularly known as differential rent. According to him Rent is the price paid for the use of land.
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.