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

<p><span class="math-container">$$\text{Producer Surplus}=\text{Profit}+\text{Fixed Cost}$$</span></p>

<p>assuming that fixed cost is sunk. </p>

CC BY-SA 4.0
2020-11-14T17:10:12.473Z
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.(?)
sba222
CC BY-SA 4.0
2020-11-14T19:07:52.167Z
@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.
Herr K.
CC BY-SA 4.0
2020-04-20T15:03:23.100Z
2020-04-20T15:03:23.100Z
Herr K.
<p>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.<br>
In this sense both would refer to the same thing.
Is this correct?</p>

<monopoly>
What is the difference between monopoly profit and monopoly rent?
sba222
# What is the difference between monopoly profit and monopoly rent?

(Asked by: username_0 on 2020-04-20)

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?

**Tags:** monopoly


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## 1 answers

### Answer by username_1 on 2020-04-20. Score: 1 | Accepted answer

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.

> **Comments:**
> **username_0**: 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.(?)  
> **username_1**: @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.  

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