ORGANIZATION OF THE FARM 



penditure per acre in value would be decreased 

 and the profits of the farmer would be increased 

 in the same proportion. This higher profit might 

 increase the demand for land, however, and this 

 would likely result in a rise in rents, after which 

 it would pay to increase the quantity of labor and 

 capital-goods employed, excepting in the case of 

 the share tenant. 



The intluence of a rise or fall in the price for 

 which the product can be sold, will influence the 

 degree of intensity only as it may affect the 

 amount of rent which must be paid for the use 

 of land. As prices rise the rent tends to rise and 

 the degree of intensity should be increased, while 

 the reverse is true in the case of falling prices. 

 This is true because land of a given degree of 

 productivity is limited, and as labor and capital- 

 goods increase in quantity, land of a less pro- 

 ductive grade must be resorted to, and without 

 improvements this is possible only when wages 

 and interest fall or prices rise. But there is a 

 close relation betueen the gross return which the 

 marginal land \\ ill yield and the amount of wages 

 and interest which labor and capital-goods can 

 command on other grades of land. This means 

 of course that as the less productive lands are 

 morted to the rent which the competitors will 

 for the better land will rise, and then the 

 largest net retmu and hence the largest net profit 



til 



