I understand that monopoly profit is the return on capital (=profit) of the monopolist, which is larger than the normal profit in a competitive market. As monopoly rent I understand the income in excess of the factor cost (=rent) of the monopolist.
In this sense both would refer to the same thing. Is this correct?


Economic (not just monopoly) rent is what is otherwise known as produces surplus. And producer surplus is related to profit via

$$\text{Producer Surplus}=\text{Profit}+\text{Fixed Cost}$$

assuming that fixed cost is sunk.

  • $\begingroup$ Thank you. But isn't economic rent typically understood as payment "in excess of the costs needed to bring that factor into production”? In a long term perspective a decision will be made whether or not to incur Fixed Costs. That would imply that in the long term Profit and (monopoly) rent/Producer Surplus do correspond.(?) $\endgroup$
    – sba222
    Nov 14 '20 at 17:10
  • $\begingroup$ @Steve222: Note that the equation I gave assumes that fixed costs are sunk. In the long run there is no sunk cost, so profit is the same as producer surplus. $\endgroup$
    – Herr K.
    Nov 14 '20 at 19:07

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