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  Rent

Rent:

In common language, “rent” refers to any periodic payment made for the utilization of a good. For illustration, whenever we live in someone’s house, we give rent. The rent here is contract payment. The contract rent comprises besides the payment made for the utilization of land, interest on the capital invested in the house, wages and gain. However classical economists such as Ricardo termed by “rent” to the payment made for the utilization of agricultural land. Rent occurs since of the peculiar characteristics of land. The supply of land is inelastic and it varies in fertility. Rent occurs since of differences in the fertility. Those lands that are more fertile than others acquire rent.

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