Professor Marshall gave the concept of Quasi-rent. It is the rent accruing to any factor of production other than land. It refers to the temporary return to the factor of production whose supply cannot be adjusted to demand in the short-run with the increase in the factor of production, the quasi rent disappears. For example at the time of creation of Pakistan, the demand for houses increased owning to increase in population.
But the supply could not be increased because of the sacristy of building materials. For the time being , their supply was much limited as that of land. Rent rose. This abnormal increase in the return on capital invested in building is nothing but Quasi-rent. It is not pure rent as the supply of houses can be increased in the long –run. At that time the abnormal increase in rent will disappear.
Quasi-rent arises in the case durable goods like houses, machine and in case of a particular kind of skill. It arises due to a temporary scarcity of a particular durable goods or skill which can be increased only if enough time is give. Whereas economic rent is the surplus paid to the owner of the land for the use of the original and indestructible powers.
But the supply could not be increased because of the sacristy of building materials. For the time being , their supply was much limited as that of land. Rent rose. This abnormal increase in the return on capital invested in building is nothing but Quasi-rent. It is not pure rent as the supply of houses can be increased in the long –run. At that time the abnormal increase in rent will disappear.
Quasi-rent arises in the case durable goods like houses, machine and in case of a particular kind of skill. It arises due to a temporary scarcity of a particular durable goods or skill which can be increased only if enough time is give. Whereas economic rent is the surplus paid to the owner of the land for the use of the original and indestructible powers.