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# Agricultural Economic Potential

## Definition

The maximum productivity and prosperity that agricultural regions could achieve given their natural advantages, which Smith argues was systematically frustrated by medieval institutions that prevented farmers from fully exploiting their comparative advantages through trade and specialization.

## Source Chapter

Book III, Chapter 2

## Context

Smith uses this concept to show how medieval Europe operated far below its agricultural potential, with naturally fertile regions like Italy prevented from exploiting their advantages while less fertile areas lacked the institutional framework to compensate through trade and specialization.

## Economic Domain

Production

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