Capital III, Chapter 43 - Part 4

The next set of tables show the situation where the price of production is falling. This can only be the case where the marginal productivity is rising, or else where land type A is pushed out of production, so that the more fertile, lower cost lands become the regulator.

Table XVI shows the situation where marginal productivity remains constant.

TABLE XVI
Type of Soil	Price of Production Shillings	Output Bushels	Selling Price Shillings	Proceeds Shillings	Rent Shillings	Rent Increase
B	60.00 + 60.00 = 120.00	12 + 12 = 24	5.00	120.00	0	0
C	60.00 + 60.00 = 120.00	14 + 14 = 28	5.00	140.00	20.00	20
D	60.00 + 60.00 = 120.00	16 + 16 = 32	5.00	160.00	40.00	2 × 20
E	60.00 + 60.00 = 120.00	18 + 18 = 36	5.00	180.00	60.00	3 × 20
		120		600.00	120.00	6 × 20

Table XVII shows the situation where marginal productivity is falling.

TABLE XVII
Type of Soil	Price of Production Shillings	Output Bushels	Selling Price Shillings	Proceeds Shillings	Rent Shillings	Rent Increase
B	60 + 60 = 120	12 + 9 = 21	5.71	120	0	0
C	60 + 60 = 120	14 + 10½ = 24½	5.71	140	20	20
D	60 + 60 = 120	16 + 12 = 28	5.71	160	40	2 × 20
E	60 + 60 = 120	18 + 13½ = 31½	5.71	180	60	3 × 20
					120	6 × 20

Table XVIII shows the situation where marginal productivity is rising.

TABLE XVIII
Type of Soil	Price of Production Shillings	Output Bushels	Selling Price Shillings	Proceeds Shillings	Rent Shillings	Rent Increase
A	60 + 60 = 120	10 + 15 = 25	4.80	120	0	0
B	60 + 60 = 120	12 + 18 = 30	4.80	144	24	24
C	60 + 60 = 120	14 + 21 = 35	4.80	168	48	2 × 24
D	60 + 60 = 120	16 + 24 = 46	4.80	192	72	3 × 24
E	60 + 60 = 120	18 + 27 = 45	4.80	216	96	4 × 24
					240	10 × 24

Where the price of production is rising, land type A may continue to be the regulator, or else an even worse soil type may begin to be cultivated, thereby becoming the regulator, and turning land type A into rent producing land.

The first set of examples assume that land type A remains the regulator.

Table XIX presents the case previously discussed, whereby the marginal productivity of the second investment remains constant or rises. This is only possible where the productivity of the first investment falls, for example, due to the wearing out of the top soil. Overall, therefore, the average productivity falls, and the price of production rises.

In Table XIX, the marginal productivity of the second investment is constant, whilst Table XXI presents the situation where it is rising.

TABLE XIX
Type of Soil	Price of Production Shillings	Output Bushels	Selling Price Shillings	Proceeds Shillings	Rent Shillings	Rent Increase
A	60 + 60 = 120	7.50 + 10 = 17.50	6.86	120	0	0
B	60 + 60 = 120	9 + 12 = 21	6.86	144	24	24
C	60 + 60 = 120	10.50 + 14 = 24.50	6.86	168	48	2 × 24
D	60 + 60 = 120	12 + 16 = 28	6.86	192	72	3 × 24
E	60 + 60 = 120	13.50 + 18 = 31.50	6.86	216	96	4 × 24
					240	10 × 24

TABLE XXI
Type of Soil	Price of Production Shillings	Output Bushels	Selling Price Shillings	Proceeds Shillings	Rent Shillings	Rent Increase
A	60 + 60 = 120	5 + 12.50 = 17.50	6.86	120	0	0
B	60 + 60 = 120	6 + 15 = 21	6.86	144	24	24
C	60 + 60 = 120	7 + 17.50 = 24.50	6.86	168	48	2 × 24
D	60 + 60 = 120	8 + 20 = 28	6.86	192	72	3 × 24
E	60 + 60 = 120	9 + 22.50 = 31.50	6.86	216	96	4 × 24
					240	10 × 24

Table XX presents the situation where the marginal productivity of the second investment is falling, so here there is no need to assume that the productivity of the first investment is falling.

TABLE XX
Type of Soil	Price of Production Shillings	Output Bushels	Selling Price Shillings	Proceeds Shillings	Rent Shillings	Rent Increase
A	60 + 60 = 120	10 + 5 = 15	8	120	0	0
B	60 + 60 = 120	12 + 6 = 18	8	144	24	24
C	60 + 60 = 120	14 + 7 = 21	8	168	48	2 × 24
D	60 + 60 = 120	16 + 8 = 24	8	192	72	3 × 24
E	60 + 60 = 120	18 + 9 = 27	8	216	96	4 × 24
					240	10 × 24

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