Economic rents

Economic rents
Profits in excess of the competitive level.
Related Terms: ...

' The vast majority of economists believe that economic rents do serve a useful purpose. Most important, they allocate goods to their highest-valued use.

The order quantity that minimizes total inventory costs.
Economic rents
Profits in excess of the competitive level.
Economic risk ...

The gain to a producer or resource owner resulting from a trade barrier or other restriction of supply that leads to a higher price than otherwise would occur. The existence or prospect of economic rents may promote unproductive rent-seeking ...

For example, higher mortgage interest payments would be an extra expenditure for many people. However, strictly speaking, they represent economic rents (transfers of wealth) rather than payments for services, ...

In PERFECT COMPETITION, there are no economic rents, as new FIRMS enter a market and compete until PRICES fall and all rent is eliminated.

The using up of real resources in an effort to secure the rights to economic rents that arise from government policies. In international economics the term usually refers to efforts to obtain quota rents. Term introduced by Krueger 1974.

See also: Economic rent, Economic risk, Economic order quantity, Project Financing, Operating profit