36 BULLETIN 1277. U. 8. DEPARTMENT OE AGRICTTLTDBB 
ing of cost rates, especially for man labor, horse labor, and land, 
to fit varying proportions of enterprises; and (3) the measuring of 
the rallies of contributions by one- enterprise to another. These 
difficulties are so nearly insuperable as to make any highly accurate- 
choosing of enterprises by this method impossible. Since, however, 
there is such a large element of forecast in the whole determination — 
forecasts of cost rates, forecasts of prices, etc. — an error in any of 
the. three particulars just named may not be so serious after all. 
The fundamental data upon which the study of the combination 
of enterprises is based is the same input data upon which least-cost 
and most profitable combinations of input factors are based. 
FURTHER APPLICATIONS 
There are several further ways in which material studied by the 
method outlined above may be applied. The study of input varia- 
tions and of input per unit of output is directly applicable to " oper- 
ation n problems — to improving day-to-day practices. These results 
can be presented as production standards which will enable farmers 
to judge of their own efficiency and indicate what changes will make 
their production more efficient and profitable ; and they can also be 
used in the choice of farm practices, to determine the advisability of 
using specific practices, such as fall rather than spring plowing and 
pasture in preference to dry-lot feeding. 
The best organization for the whole farm business may be studied 
from several different angles. Detailed plans can be made for a 
given farm for a given year and the most probable net return under 
each plan estimated. In so planning a farm business it is essential 
to be able to estimate probable costs and returns. The use of prop- 
erly analyzed input and output data will lessen the error of estimate 
in such planning. Or the problem may be approached from the 
viewpoint of determining what modifications should be made in the 
existing combinations of enterprises. For this purpose the least-cost 
or greatest-profit combinations of inputs for the different enterprises 
may be used as the basis of cost indices which, together with fore- 
casted prices, will give advance information as to probable trends in 
the relative profitableness of competing enterprises when they are 
conducted in the proper economic combinations. 
Data analyzed by this method offer new material for the study of 
the relations between production costs and prices. The least-cost and 
greatest-profit combinations at various prices of the input factors 
may be used to throw light on the elasticity of supply of different 
products, to aid in determining to what extent farmers increase or 
decrease their production with changes in the prices which they re- 
ceive. It is only to the extent that farmers do make such changes 
that the costs they incur in their production affect the price they re- 
ceive for their products. Volume produced, not cost of production, 
is the active force on the supply end of the supply-and-demand 
equation. 
PRODUCTION STANDARDS 
Xo use for production data is more important than that of supply- 
ing individual producers with standards by which they may judge 
the efficiency of their own performance. Tables 1 to 22, with some 
further analysis, supply this need. 
