Economics • Economic BasicsHard
In neoclassical economics, what does the term 'Quasi-Rent' refer to?
A. The rent paid for agricultural land in the short run
B. The short-run earnings of a durable factor of production whose supply is fixed in the short run but variable in the long run✓ Correct Answer
C. The subsidy provided by the government to renters of public housing
D. The long-run excess profit earned exclusively under monopolistic competition
💡 Solution & Explanation
Quasi-rent, a concept originally formulated by economist Alfred Marshall, represents the short-run earnings of durable capital equipment or man-made production factors whose supply remains fixed in the short run. Unlike pure economic rent associated with permanent natural resources, quasi-rent disappears in the long run as factor supplies adjust to market demands. This terminology is frequently explored in microeconomic theory and factor pricing topics.
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