What is meant by economic rent

Economic rent is the additional reward/payment over and above what is required to keep a factor of production in its present use or it a reward over its transfer earning.

Given that a factor of production receives a transfer earning of Ug. Shs. 100,000  and its economic rent is twice its transfer earning. Calculate the factor’s actual earning. (2marks)

Actual earning = transfer earning + economic rent

= 100,000 + 2(100,000) = Ug. Shs. 300,000