ORGANIZATION OF THE FARM 



posite unit of labor and capital-goods applied, the 

 higher the average return per unit, the greater 

 will be the farmer's net profit per composite unit, 

 and under the assumption that, in the production 

 of a given crop, the same amount of managerial 

 activity is required per composite unit without 

 regard to the area of the land on which it is em- 

 ployed, and when there is no rent to pay, the 

 applications should increase until the point of 

 maximum average returns per unit is reached. 

 This is the most extensive agriculture that is con- 

 sistent with the greatest net profit to the farmer 

 under any circumstances; in the production of a 

 given crop, and, under the above assumption as 

 to demands upon managerial activity, it is the 

 most intensive that is in accordance with the 

 farmer's highest economic interest, where the 

 use of land may be had free. 



It has been said 1 that the intensity of culture 

 should be increased until the final increment adds 

 no more to the total product than enough to cover 

 the cost of that unit. If, in Fig. i, for example, 

 the value of the product represented by a rect- 

 angle whose sides are K L and L L' equals the 

 cost of securing the use of a composite unit, the 

 applications should, according to this view, be 

 increased just to point L. It is true that this 

 would enable the farmer to secure the largest net 

 profit per acre of land, but unless he be a marginal 



1 T. N. Carver, The Distribution of Wealth, p. 80. 

 103 



