economic rent

The time required to adjust the mix of productive services gives rise to the concept of economic renter surplus productivity. In the short run, certain productive factors are fixed and the quantity used cannot be expanded. If there is an increase in the demand for housing in a particular suburb the price of housing there will rise above its long run equilibrium price. During the period of adjustment owners of houses in that suburb will receive more than the normal long term rental return. The excess return is called economic rent, quasi rent or sometimes, pure profits.

See land rent

See location

See external environments

See clustering

See production and supply

See law of diminishing returns