Increased Production Causing Increased Price: An Example
Ricardo's theory results in one counterintuitive result: with scarce resources, like land, an increase in the amount produced can actually cause the price of that good to increase.
To illustrate, consider wheat farmers outside of London (numbers are made up, and are not historically accurate, for clarity). Say there are three types of land outside of London in 1759 that can be used to make wheat:
Read more about this topic: Law Of Rent
Famous quotes containing the words increased, production and/or causing:
“If the twentieth century is to be better than the nineteenth, it will be because there are among us men who walk in Priestley’s footsteps....To all eternity, the sum of truth and right will have been increased by their means; to all eternity, falsehoods and injustice will be the weaker because they have lived.”
—Thomas Henry Huxley (1825–95)
“In the production of the necessaries of life Nature is ready enough to assist man.”
—Henry David Thoreau (1817–1862)
“But most of us are apt to settle within ourselves that the man who blocks our way is odious, and not to mind causing him a little of the disgust which his personality excites in ourselves.”
—George Eliot [Mary Ann (or Marian)