of land is zero At a price of zero, there is still one acre of land; quantity is unaffected by price If the price were to rise, there would still be only one acre in the parcel That means that the price of the parcel exceeds the minimum price—zero—at which the land would be available The amount by which any price exceeds the minimum price necessary to make a resource available is called economic rent The concept of economic rent can be applied to any factor of production that is in fixed supply above a certain price In this sense, much of the salary received by Brad Pitt constitutes economic rent At a low enough salary, he might choose to leave the entertainment industry How low would depend on what he could earn in a best alternative occupation If he earns $30 million per year now but could earn $100,000 in a best alternative occupation, then $29.9 million of his salary is economic rent Most of his current earnings are in the form of economic rent, because his salary substantially exceeds the minimum price necessary to keep him supplying his resources to current purposes KEY TAKEAWAYS Natural resources are either exhaustible or renewable The demand for the services of a natural resource in any period is given by the marginal revenue product of those services Owners of natural resources have an incentive to take into account the current price, the expected future demand for them, and the interest rate when making choices about resource supply The services of a renewable natural resource may be consumed at levels that are below or greater than the carrying capacity of the resource Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 721