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QUASI-RENT: The payment that is received by a resource of production activity over the opportunity cost in the short run. The notion of quasi-rent is similar to economic rent, or economic profit, which is payment or revenue received over opportunity cost. The key difference is that quasi-rent is a short-run phenomenon. While quasi-rent is "extra" payment received in the short run, such payment might be essential to keep the resource or production activity in the long run. An example is the quasi-rent received due to the patent on a technological innovation. In the short run, the revenue received can be considered as profit in excess of the opportunity cost of production. However, in the long run this extra revenue motivates innovators to develop new technology. Without quasi-rent the innovations would not occur.
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PERFECT COMPETITION, SHUTDOWN A perfectly competitive firm is presumed to shutdown production and produce no output in the short run, if price is less than average variable cost. This is one of three short-run production alternatives facing a firm. The other two are profit maximization (if price exceeds average total cost) and loss minimization (if price is greater than average variable cost but less than average total cost).
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time wandering around the downtown area seeking to buy either a genuine down-filled snow parka or throw pillows for your living room sofa. Be on the lookout for slightly overweight pizza delivery guys.
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The Dow Jones family of stock market price indexes began with a simple average of 11 stock prices in 1884.
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"Progress always involves risk. You can't steal second base and keep your foot on first. " -- Frederick B. Wilcox
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MFN
Most-Favoured Nation
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