Ricardo's Law of Rent

Ricardo's Law of Rent states that the rent of land is determined by its fertility and location, specifically the most productive land being rented out first. As more land is cultivated, less fertile or less ideally located land must be used, which commands lower rent. Consequently, rent arises from the difference in productivity between the best land and lesser lands, not from the land’s own inherent value. This means rent depends on how much extra output a piece of land can produce compared to the least productive land in use.