AGRICULTURAL ECONOMICS 



is willing to pay a differential rent for it equal to 

 one-half of the product. 



Let it be said that the D grade or marginal 

 farmer's product on B grade land is valued at n 

 (represented by the line B D r in Fig. 6), that his 

 product upon A grade land is valued at 2n (rep- 

 resented by the line AD), and that he is willing 

 to pay a differential rent of n (line ED), for the 

 use of A grade land. Then the value of the prod- 

 uct of the C grade farmer, who is qualitatively 

 twice as efficient as the marginal farmer, will be 2n 

 (line B C') on B grade land, and 411 (line AC) 

 on A grade land. Thus, while the C grade 

 farmer can gain an extra product valued at n (line 

 D' C') on B grade land, his extra product on A 

 grade land, above what the D grade farmer could 

 produce, is valued at 2n (line DC). Hence the 

 C grade farmer will not compete for B grade land 

 until the rent on A grade land rises sufficiently to 

 absorb half of this extra product, so that his net 

 profit will be the same on both pieces of land. 

 Until rent rises to zn on A grade land (that is, to 

 point K in Fig. 6, and measured by the line E K) , 

 the personal profit which the C grade farmer can 

 win on such land will be greater than that which 

 he could win from B grade land. If the differen- 

 tial rent of A grade land should rise to zn (that 

 is, to point K), the C grade farmer's personal 

 profits on A grade land (represented by line K C), 

 would be the same as that which he could win 

 168 



