Rent Seeking

A rent can be defined as a payment to the owner of any input that is used in production, such as a building in which a company operates its business, over and above what is necessary to bring forth its supply. Here the building is considered a fixed input because it will not vary in the short run as the value of the company's business rises and falls. Thus, any payment to the building's owner beyond its value in its next-most valuable use (i.e., its opportunity cost) would be considered a rent. Payment for an input that covers the opportunity cost but not more, such as a worker's wage that compensates only for the value of his lost leisure time, is therefore not rent (e.g., ...