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Economic rent is viewed as unearned revenue [2] while economic profit is a narrower term describing surplus income earned by choosing between risk-adjusted alternatives. Unlike economic profit, economic rent cannot be theoretically eliminated by competition because any actions the recipient of the income may take such as improving the object to ...
The absolute ground rent is sometimes explained as the rent which landowners can extract because they monopolise the access to or supply of land, and sometimes as the rent which arises due to the difference between the product-values and prices of production of output in agriculture, because of a lower than average organic composition of ...
The law of rent states that the rent of a land site is equal to the economic advantage obtained by using the site in its most productive use, relative to the advantage obtained by using marginal (i.e., the best rent-free) land for the same purpose, given the same inputs of labor and capital.
Firm x will move slightly toward Firm y, in order to gain Firm y's customers. In response, Firm y will move slightly toward Firm x to re-establish its loss, and increase the pool from its competitor. The cycle repeats until both firms are at point o {\displaystyle o\,} , the halfway point of the street where each firm has the same number of ...
Company Y operates at a site where it is relatively difficult to extract coal. Its costs (including normal returns) amount to $30/t. Company X will ‘create’ more resource rent because of the more accessible resource. Scarcity rent The marginal opportunity cost imposed on future generations by extracting one more unit of a resource today ...
Railway in Germany.. While others should get some credit for earlier work (e.g., Richard Cantillon, Etienne Bonnot de Condillac, David Hume, Sir James D. Steuart, and David Ricardo), it was not until the publication of Johann Heinrich von Thünen's first volume of Der Isolierte Staat in 1826 that location theory can be said to have really gotten underway.
Bid rent curve. The bid rent theory is a geographical economic theory that refers to how the price and demand for real estate change as the distance from the central business district (CBD) increases. Bid Rent Theory was developed by William Alonso in 1964, it was extended from the Von-thunen Model (1826), who analyzed agricultural land use.
A simple model (with assumptions to be detailed later) is helpful to illustrate Tiebout's insight and theory. Suppose there are 2 * N families with identical income Y, 2 towns with N homes each, and each town supplies level G of local public schools.