ORGANIZATION OF THE FARM 



rent, and the average net return at that point is 

 zero. After the application of five units the aver- 

 age net return per unit will be represented by one- 

 fifth of the area R R' H' H; for the total return 

 minus the rent is represented by the area R R' 

 H' H, and since five units have been applied this 

 net return must be divided by five to find the 

 average. Likewise after the application of the 

 sixth unit, it will be one-sixth of the area R R' 

 I' I. After the application of the seventh unit, 

 the average will be one-seventh of the area R R' 

 K f K. Thus the line of average net returns (line 

 R Y' P' in Fig. i ) rises rapidly until the line / /' 

 is crossed, after which it rises less rapidly until it 

 crosses the line /' B, after which it falls. When 

 a fixed rent is paid, the line of average net returns 

 can never rise so high as the line of average gross 

 returns, and the point Y' , where the line of aver- 

 age net returns reaches its maximum distance 

 from the base line A B, will always be farther 

 to the right than point X' ; and hence the high- 

 est average net return per composite unit of 

 labor and capital-goods employed on land for 

 which a fixed rent must be paid, will be gained 

 by a more intensive culture than when the same 

 land could be had rent free. 



When the farmer follows the rule of seeking 

 the largest net profit for his exertion, the degree 

 of intensity of culture on a given piece of land 

 and in the production of a given crop will vary 



107 



