What Is Quasi Rent?

Professor Marshall gave the concept of Quasi-rent. It is the rent accruing to any factor of production other than land. It refers to the temporary return to the factor of production whose supply cannot be adjusted to demand  in the short-run with the increase in the factor of production, the quasi  rent disappears. For example at the time of creation  of Pakistan, the demand  for houses increased owning  to increase in population.

But the supply could not be increased because  of the  sacristy of building  materials. For  the time  being , their supply was  much limited as that of land. Rent rose. This abnormal increase in  the return  on capital  invested in building  is nothing but Quasi-rent. It is not pure rent as the supply  of houses  can be increased in the long –run. At that time the abnormal  increase in rent will disappear.

Quasi-rent arises  in the case durable goods like houses,  machine  and in case of a particular  kind of skill. It arises  due to a temporary  scarcity of a particular durable goods or skill which can be increased  only if enough time is give. Whereas economic rent is the surplus paid to the owner of the land for the use of the original and indestructible powers.