Economic Rent
Payment to a factor of production above the minimum required to keep it in its current use.
What is Economic Rent?
Economic rent is the surplus payment received by a factor of production — land, labor, or capital — beyond the minimum amount necessary to keep it employed in its current use. The classic example is land: because the supply of prime locations is fixed, landowners can charge prices far above what would be required to bring land into productive use. Similarly, a star athlete or in-demand executive earns far more than their transfer earnings — what they could earn in their best alternative. Economic rent does not generate new productive activity; it reflects market power conferred by scarcity. Taxing economic rent is considered relatively efficient because it does not distort production decisions the way taxes on wages or profits do.
Example
A pop star earns $20 million per year. Her next-best alternative is a career in theater earning $200,000 per year. Her economic rent is $19.8 million — the surplus above what is needed to keep her in the music industry. This rent arises from the scarcity of her unique talent and the enormous audience willing to pay for it.
Source: Investopedia — Economic Rent