# average-produce

## Definition

Average produce refers to the typical or expected output from a given quantity of industry or labour over time, as opposed to the actual produce which may vary significantly from year to year. This concept is particularly relevant in agriculture where the same number of labourers may produce very different quantities in different years due to natural variations, while manufacturing tends to produce more consistent output.

## Source Chapter

Book 1, Chapter 7: "OF THE NATURAL AND MARKET PRICE OF COMMODITIES."

## Context

Smith uses average produce to explain why agricultural commodity prices fluctuate more than manufactured goods prices. He argues that only average produce can be suited to effectual demand, while actual annual variations create temporary surpluses or shortages that cause price fluctuations.

## Economic Domain

Production

## Smith's Original Wording

"But, in some employments, the same quantity of industry will, in different years, produce very different quantities of commodities; while, in others, it will produce always the same, or very nearly the same. The same number of labourers in husbandry will, in different years, produce very different quantities of corn, wine, oil, hops, etc. But the same number of spinners or weavers will every year produce the same, or very nearly the same, quantity of linen and woollen cloth."

## Modern Interpretation

Average produce represents the expected yield from productive activity, accounting for natural variations in output. This concept is fundamental to understanding risk, uncertainty, and price volatility in different sectors of the economy.