AGRICULTURAL ECONOMICS 



returns to the units already employed. In other 

 words, each succeeding composite unit brought 

 under a given amount of managerial activity will 

 add less and less to the total product until finally 

 the point will be reached where the net addition 

 to the total product due to an additional com- 

 posite unit will no more than pay the costs of 

 engaging the cooperation of such unit, and at this 

 point the additions should cease if the farmer 

 would attain to the ideal, that is, if he would se- 

 cure the largest net profit for a given amount of 

 exertion. 



This point may be illustrated by means of the 

 following table, in which the number of com- 

 posite units (a unit may be thought of in this 

 illustration as one laborer and the amount of 

 capital-goods and land which should be associated 

 with him) to be associated with one unit of man- 

 agerial activity (which may be thought of as the 

 amount of such activity which one farmer wishes 

 to devote to agricultural production) is increased 

 from one to ten, and as a result of the increase 

 in the number of the composite units brought 

 under the one management the net profit per corrt- 

 posite unit is represented as gradually falling 

 from $260 to $40, while the resulting net profit 

 per unit of managerial activity is represented as 

 increasing until after the fifth composite unit is 

 added, after which it is represented as falling. 



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