Business Glossary

Appraisal: market rent. See also contract rent .
Economics: cost commanded by a factor that is unique or inelastic in supply. An example is the portion of rental income attributable to land, since the land will exist no matter what the rental rate. In this context, economic rent carries a connotation of being "unearned" by the owner.

1. in economics, the cost commanded by a factor that is unique or inelastic in supply.
   Example: The portion of rental income attributable to the land is often considered economic rent, since the land will exist no matter what the rental rate. In this context, economic rent carries a connotation of being "unearned" by its owner.

2. in appraisal, the market rent . Contrast with contract rent .
   Example: Big Buy Foods is using a store for $1,000 per month rent. If the landlord could rent the store on a new lease now, it would command $4,000 per month. The $1,000 is the contract rent and the $4,000 is the economic rent.