It is on the base of rent. Rent is what we are supposed to pay for something we are using in many ways. It is the price of land. It is a payment to be made by a tenant farmer to the landlord for the use of original and indestructible powers of the soils.The theory of economics was first introduced by the English classical economist David Ricardo he defines rent as that "portion of the produce of the earth which is paid to a landlord on account of the original and indestructible powers of the soil".
According to Ricardo rent is the reward of land or its natural resources. It is revenue after covering the cost of production where the other resources are dully paid including normal profit. Rent is not a part of cost of population, it is surplus over expenses. The amount of rent indirectly depends upon surplus of population. Ricardo held that total output was divided into three shares. Hope it may be clear to You!
According to Ricardo rent is the reward of land or its natural resources. It is revenue after covering the cost of production where the other resources are dully paid including normal profit. Rent is not a part of cost of population, it is surplus over expenses. The amount of rent indirectly depends upon surplus of population. Ricardo held that total output was divided into three shares. Hope it may be clear to You!
