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:
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—Benjamin Harrison (1833–1901)
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—Gus Hall (b. 1910)
“The most stringent protection of free speech would not protect a man in falsely shouting fire in a theater and causing a panic.”
—Oliver Wendell Holmes, Jr. (1841–1935)