Q.Distinguish between economic rent and quasi-rent.
Economic rent is the modern, generalised version of Ricardo's idea: it is the surplus any factor of production earns over its transfer earnings — what it could earn in its next-best alternative use — and arises purely because that factor's supply is scarce relative to demand. Land is the classic example, since its supply can never be increased no matter how much is paid for it, so economic rent on land can be a PERMANENT feature.
Quasi-rent, a term introduced by Alfred Marshall, describes a more temporary version of the same phenomenon, applied to man-made factors such as machinery. In the SHORT RUN, a factory's stock of machines is fixed — more units cannot be built overnight — so any surplus the machine earns above its running costs behaves exactly like Ricardian rent. But in the LONG RUN, if this surplus persists, more machines of that type will be manufactured, supply becomes elastic, and the extra surplus is competed away, driving returns down to a normal level. Economic rent (on a genuinely fixed-supply factor like land) can last indefinitely; quasi-rent (on a temporarily fixed-supply factor like a machine) is, by its very nature, a short-run-only surplus.
Economic rent is the surplus any factor earns over its transfer earnings due to scarcity of supply, and can be permanent (as with land, whose supply never increases). Quasi-rent, coined by Marshall, is the SHORT-RUN surplus earned by a man-made factor (like a machine) whose supply is only TEMPORARILY fixed; it tends to disappear in the long run as more units of the factor are produced.
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