# Agricultural Price Differential ## Definition The price advantage enjoyed by agricultural producers located near towns, who receive the same price for their produce as distant producers while saving transportation costs. This differential creates economic incentives for land improvement near markets and contributes to the spatial concentration of agricultural development around urban centers. ## Source Chapter Book III, Chapter 1 ## Context Smith uses this price differential to explain observed patterns of land cultivation and value, demonstrating how market proximity creates economic advantages that shape the spatial organization of agricultural production. ## Economic Domain Exchange ---