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Modern Theory of Rent
This theory is also known as demand and supply theory of land. It is based on the following assumptions:
1. There is always perfect competition among various cultivations.
2. The fertility of different lands is same.
3. The land is used for a particular job.
Explanation of the Theory
The theory explains the concept of rent in terms of demand and supply. According to the theory rent is payment for the use of land. Demand for the use of land is actually the demand for that product which is produced on it. Demand for the land will increase with increase in demand for that particular product. Since th supply of land is fixed i.e. the supply cannot increase or decrease therefore the rise or fall of rent will be entirely governed by it's demand. Thus on the side of demand rent of land is determined by its productivity not total productivity, but marginal productivity. And for supply, the supply of land in general is absolutely inelastic, as such in supply is independent of what it earns. From the following figure it is clear that the supply of land is fixed SS, while as demand is increasing from DD to D'D' and to D'' to D'', the rent is also increasing from RR to R'R' and to R''R''.
ANSWERED BY KISHOR
BVIMED
What else can I help you with?
Scholars is associated with the economic theory of rent?
Thomas Robert Malthus
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the traditional theory explains cost curve u shape, but in modern theory says that cost curve L shape
What is Ricardo's theory of rent?
well a$$ hole. a pigeon just ran into the window
What is the modern theory of international trade?
The modern theory of international trade works on assumptions of the law of comparative advantage. The comparative advantage arises as a result of differences in the various regions.
What is the best book on Modern Monetary Theory (MMT) that provides a comprehensive understanding of the concept and its implications?
One highly recommended book on Modern Monetary Theory (MMT) that provides a comprehensive understanding of the concept and its implications is "The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy" by Stephanie Kelton. This book explains MMT in a clear and accessible way, making it a great resource for those looking to learn more about this economic theory.
What is modern theory of rent with an example and diagram?
The modern theory of rent states that rent arises from differences in productivity or quality of land. In other words, rent is the payment made for the use of land that has a higher productivity than the least productive land in use. For example, in agriculture, land closer to a water source may yield higher crops, leading to higher rent. A diagram illustrating this concept would show a sloping line representing land productivity, with rent increasing as land quality improves.
What has the author T A Broadbent written?
T. A. Broadbent has written: 'Employment, obsolescence and investment in new technology' 'Options for planning' 'An attempt to apply Marx's theory of ground rent to the modern urban economy' -- subject(s): Rent (Economic theory), Rent 'An introduction to factor analysis and its application in regional science'
What are the criticism of bid rent theory?
Critics argue that bid rent theory oversimplifies urban land-use patterns by assuming a linear relationship between land rent and distance from the CBD, overlooking other factors that influence land value. Additionally, it fails to account for non-economic factors that can shape urban development, such as zoning regulations, cultural preferences, and historical legacies. Lastly, bid rent theory does not adequately address the complexities of transportation networks and how they impact land use patterns in modern cities.
What is the most modern theory of light?
The most modern theory of light is the quantum theory.
Who is the father of modern theory?
HENRY FAYOL is the father of modern operational management theory.
Who is the father of modern management theory?
HENRY FAYOL is the father of modern operational management theory.
What is the Limitations of bid rent theory?
because it is cool because it is cool
Scholars is associated with the economic theory of rent?
Thomas Robert Malthus
When was the modern portfolio theory developed?
. Harry Markowitz established the foundation of modern portfolio theory in 1952.
What is modern theory of cost of production?
the traditional theory explains cost curve u shape, but in modern theory says that cost curve L shape
What is the modern theory of evolution also known as?
The modern theory of evolution is also known as the synthetic theory of evolution or the modern synthesis. It combines Darwin's theory of natural selection with genetics and other fields of biology to explain how organisms evolve over time.
What is Ricardo's theory of rent?
well a$$ hole. a pigeon just ran into the window
