The upcoming discussion will update you about the relationship between rent and price of the crop. (i) Ricardo's View: According to Ricardo, "rent does not and cannot enter in the least degree into price of the agricultural produce"; it is rather the result of price. "Corn is not high," as observes Ricardo, "because a rent is paid but rent is [...]
In this article we will discuss about:- 1. Introduction to the Ricardian Theory of Rent 2. Assumptions of the Ricardian Theory of Rent 3. Explanation and Illustration 4. Criticisms. Introduction to the Ricardian Theory of Rent: David Ricardo, an English classical economist, propounded a theory to explain the origin and nature of economic rent. He defined rent as "that portion [...]
In this article we will discuss about:- 1. Definition of Economic Rent 2. The Division of Total (Factor) Incomes 3. Determinants of the Division. Definition of Economic Rent: In economics rent refers to producer's surplus. It is different from contract or commercial rent, which refers to the price paid to hire something, such as a machine or a piece of [...]