Economic Rent (Noun)
Meaning
The return derived from cultivated land in excess of that derived from the poorest land cultivated under similar conditions.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The concept of economic rent is crucial in understanding the profitability of farming in different regions, as it highlights the disparities in land quality and fertility.
- Farmers who own high-quality land with rich soil and favorable climate can reap significant economic rent compared to those who cultivate poorer land.
- The economic rent earned from a plot of land is determined by its fertility, location, and accessibility to markets, among other factors.
- Agricultural economists often study economic rent to advise policymakers on how to allocate resources and incentivize farmers to cultivate land more efficiently.
- The difference in economic rent between a fertile valley and a barren hillside can be substantial, reflecting the varying levels of productivity and profitability.