ORGANIZATION OF THE FARM 



Number of Composite 



Units Associated with Net Profit per Com- Net Profit per Unit of 



a Unit of Managerial posite Unit Managerial Activity 



Activity 



1 $260 $260 



2 240 480 



3 220 660 



4 190 760 



5 160 800 



6 130 780 



7 ioo 700 



8 80 640 



9 60 540 

 10 40 400 



The figures here used are selected more or less 

 arbitrarily, it is true, but we believe they illustrate 

 quite clearly the general truth that, as the num- 

 ber of the composite units brought under one 

 management is increased, the average return per 

 composite unit, and hence the average net profit 

 per composite unit will fall, but that for a time 

 this fall in the net profit per composite unit is 

 more than balanced by the increase in the number 

 of such units, and the net profit per unit of man- 

 agerial activity continues to increase until finally 

 the point is reached where the net profit per unit 

 of managerial activity reaches its maximum, and 

 if the number of composite units associated with 

 a given amount of. managerial activity be in- 

 creased beyond this point the net profit per unit of 

 the latter, and hence the total net profit which the 

 farmer will be able to secure as a manager, will 

 be reduced below the possible maximum. 



When a great deal of managerial activity is 

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