Discuss four differences between rent and quasi rent.

1.	Discuss four differences between rent and quasi rent.
Answer» (i) Rent is earned by the free gifts of nature such as land. But Quasi-rent is the excess income earned by the man-made factors. (ii) Rent is earned both in short-run and long run. While Quasi-rent occurs only in short-run because, in the long run, man-made factors have their perfectly elastic supply. (iii) Rent is permanent earning while Quasi-rent is transitory. In other words. Quasirent is not a cost in a short period. (iv) Rent is never zero. But Quasi-rent becomes zero when the price is equal to average variable costs. (v) Rent is the difference between total earnings and total costs. But Quasi-rent is the difference between total earnings and variable costs.

Answer»

(i) Rent is earned by the free gifts of nature such as land. But Quasi-rent is the excess income earned by the man-made factors.

(ii) Rent is earned both in short-run and long run. While Quasi-rent occurs only in short-run because, in the long run, man-made factors have their perfectly elastic supply.

(iii) Rent is permanent earning while Quasi-rent is transitory. In other words. Quasirent is not a cost in a short period.

(iv) Rent is never zero. But Quasi-rent becomes zero when the price is equal to average variable costs.

(v) Rent is the difference between total earnings and total costs. But Quasi-rent is the difference between total earnings and variable costs.

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