196 AGRICULTURAL ECONOMICS 



make the same outlay as on 100 acres of sixth-grade land, for, 

 instead of a product worth $500, he would there be able to 

 secure a product worth $600. Following the same reasoning, 

 the F-grade farmer could afford to pay $200 for the fourth- 

 grade land, $300 for the third-grade land, $400 for the second- 

 grade land, and $500 for the first-grade land. 



When all the grades of land are viewed from the standpoint 

 of the A-grade farmer, it becomes apparent that he can make a 

 profit on land of any of these grades, and that he would do as 

 well to pay a rent of $200 for the use of the fifth-grade land, 

 $400 for the use of the fourth-grade land, $600 for the third, 

 $800 for the second, and $1000 for the use of the first-grade 

 land, as to farm the sixth-grade land rent free. But is there a 

 competitor who will make the A-grade farmer pay the price? 

 This we must ascertain by studying the interests of the competi- 

 tors. 



The E-grade farmer is able to produce $600 worth of products 

 on the sixth-grade land, leaving him a profit of $100. It can- 

 not be expected that he will be willing to accept less profit 

 from land of any other grade. He can pay $120 as rent for the 

 amount of fifth-grade land on which the same outlay is made 

 as on the 100 acres of sixth-grade land, and retain the same 

 profits, $720 ($5oo-t-$ioo) =$120. But the F-grade farmer 

 can bid no more than $100 for the use of the fifth-grade land, 

 and, so far as he is concerned, the E-grade farmer can have the 

 fifth-grade land for anything over $100, and can give a balance 

 to turn the bargain. Let us, in this illustration, figure that 

 he will pay $105. This will leave him a profit of $115; 

 $720 ($5oo-f-$io5)=$ii5. In bidding for the fourth-grade 

 land, he could not be expected to accept a smaller profit. His 

 gross income on fourth-grade land is $840. This, minus the 

 $500 outlay and the $115 profit that he could make on fifth- 

 grade land, leaves $225 as the maximum rent that the E-grade 

 farmer can bid for the fourth-grade land. 



When the rent of fifth-grade land is $105, the D-grade farmer 

 can secure a profit of $235 on that grade of land, 

 $840 ($5oo+$io5)=$235. He could secure this same profit 



