economic rent


Definition of economic rent

: the return for the use of a factor in excess of the minimum required to bring forth its service

Examples of economic rent in a Sentence

Recent Examples on the Web Thus, the East India Company acquired by accident the ultimate economic rent — a secure, unearned income stream. Iain Murray, National Review, "The Rise of the East India Company Is Not a Cautionary Tale about Corporate Power," 2 Nov. 2019 Daniel Leff: In media and entertainment, there’s changing consumer behaviors, and incumbents are stuck with the gravitational pull of legacy behaviors, trying to protect historic excessive economic rent. Joe Pompeo, The Hive, "“Silicon Valley and the Media World Haven’t Been Comfortable Partners”: Edgar Bronfman Jr. Dishes on His New Media V.C. Dynamo," 5 Dec. 2017

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'economic rent.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of economic rent

1889, in the meaning defined above

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The first known use of economic rent was in 1889

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Cite this Entry

“Economic rent.” Dictionary, Merriam-Webster, Accessed 5 Jul. 2020.

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More Definitions for economic rent

economic rent


Financial Definition of economic rent

What It Is

Economic rent is the minimum amount of money that an owner of land, labor or capital must receive in order to let someone else use that land, labor or capital.

How It Works

For example, your economic rent is the amount of money that makes you get out of bed in the morning. As the owner of an economic factor of production (your labor and skills), this factor has a value to you, and that value probably has something to do with the amount of debt you're in, the bills you have to pay, and the money you want to save. The value may vary depending on the demand for your skills and your own inclinations about work, but your economic rent is usually equivalent to the salary and compensation you are willing to accept to do a job.

Why It Matters

Everybody has a price, and every other factor of production has a price, too. For example, the owner of a piece of land or a large amount of cash is willing to rent it or sell it for a price that is at least equal to what it costs that owner. In some cases, economic rents are profits in excess of what the market would otherwise allow. Usually a company can receive these kinds of economic rents if is a monopoly or part of a cartel.

Source: Investing Answers

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