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Write short notes on the concept of quasi-rent?

      

Write short notes on the concept of quasi-rent?

  

Answers


Benjamin
The concept of quasi-rent was introduced by Marshall.There are some factors of production whose supply is elastic in the long run but inelastic in short run. According to marshall,these factors are machines,instruments and other things made by man.They are not in a fixed supply like land,so that the earnings from their use cannot be called rent in the economic sense.In the short run,their supply cannot increase or decrease because they are relatively durable in use and take time to make.The reward from them is not quickly adjusted to changes in market conditions.The extra earnings from these factors in the short period is called quasi-rent.So quasi-rent is the surplus earned by instruments of production other than land.
Similarly,if the supply of labour and entrepreneur is less than demand at any time,then the excessive earnings of these factors are also known as quasi-rent.For example,if the normal salary of an engineer is £5000 and he is getting £7000 due to scarcity of the qualified engineers,in this case,quasi-rent will be £2000.
Kalis answered the question on March 25, 2018 at 11:01


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