What do we mean by quasi rent?

Quasi-rent refers to that additional income which is similar to rent. According to David Ricardo, rent arises on account of fixed supply of land. But he recognizes other factors which are found in fixed supply in the short term. The additional income earned by these factors in the short-period is similar to rent.

What is the difference between rent and quasi rent?

Rent is permanent in nature while quasi rent is a temporary phenomenon. payment which all factors of production receive due to their inelastic supply in the short run. Rent arises due to differences in fertility of land whereas quasi rent arises due to the scarcity of man made appliances in the short run.

What is the formula of quasi rent?

Quasi rent can also be expressed in terms of revenue, which is as follows: Quasi-rent = Total revenue – total variable cost. In the long run, all the costs are considered as variable cost.

Who has propounded the concept of quasi?

The founder of quasi-contract based on the theory of unjust enrichment was Lord MANSFIELD who explained such obligations based upon the law as well as justice to prevent undue advantage to one person at the cost of another. The concept was first taken up in the case Moses v. Macferlan[ix].

What is Ricardian theory of rent?

Ricardo defined rent as “that portion of the produce of the earth which is paid to the landlord for the use of the original and indestructible powers of the soil.” In his theory, rent is nothing but the producer’s surplus or differential gain and it is found in land only.

What is Ricardo’s theory of rent?

Rent is the payment made to landlord for the. use of land. Ricardo was of the view that rent is paid for the fertility of land. Ricardo stated “Rent is the portion of the produce of the earth which is paid to. landlord for the use of the original and indestructible powers of the soil.

What is an example of Ricardian rent?

The first grade land, being the most fertile, produces 40 kg, the second grade 70 kg and the third grade land, being less fertile, only 20 kg. So, the first grade land earns a surplus or rent of Rs. 100, the second grade a rent of Rs. 50 and the third one earns no surplus.

What are the assumptions of Ricardian theory of rent?

The Ricardian theory is based on the assumption that lands differ in fertility. None can deny this but to say that more fertile lands earn high rents and less fertile lands earn low rents is not true. Rent arises not because of the fertility of land, but because land is scarce in relation to its demand.