When the increasing population referred to in the preceding discussion found that the wheat produced on first quality land would no longer supply their need for that commodity, they did not call a town meeting and resolve to cultivate second quality land. Instead of taking this political method of expressing their views of their needs, they adopted the economic method of offering a higher price for wheat. As soon as the price was sufficiently high to make it profitable, many persons were willing to produce wheat on the second quality land. We have seen that as soon as the second quality land became utilized a rent had to be paid for the first quality land. Rent did not begin at this point because of the employment of the second quality land; but rather the increase in the price of wheat caused both the beginning of rent on first quality land and the cultivation of second quality land. Again, the transition to third quality land was made in response to a further increase in price. Here, again, increase in price gives rise to rent. It may in general be said that rent is not a cause of increase in price; but, on the contrary, rent is caused by price increase.

This is a principle of much importance in economics and one which is often misunderstood by young students. A further elaboration of it may be, therefore, opportune. The price of wheat or of any other commodity is regulated by the principles of demand and supply, or of utility and scarcity. In our illustration the growing population caused an increase in demand for, or, in other words, a greater scarcity of, wheat, with the result that the price rose. The higher price made it possible for the owners of the better land to collect a rent for its use and it also made it possible for cultivators to make a living on land of poorer quality than that already in use.