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Economic Rent and the Value of Land

In: Production Economics

Author

Listed:
  • Svend Rasmussen

    (University of Copenhagen)

Abstract

The concept of fixed production factors was introduced and discussed in Chap. 12. The main result is that production factors become fixed when it does not pay for the firm to buy more, because the purchase price is higher and the sales price is lower than the internal value of the production factor to the firm. The larger the difference is between purchase and sales price, the higher the probability that a production factor will become a fixed factor.

Suggested Citation

  • Svend Rasmussen, 2013. "Economic Rent and the Value of Land," Springer Texts in Business and Economics, in: Production Economics, edition 2, chapter 16, pages 181-189, Springer.
    • Handle: RePEc:spr:sptchp:978-3-642-30200-8_16
    DOI: 10.1007/978-3-642-30200-8_16
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