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this video unit has drawn more from my personal experience them from any kind
of formal research any concerns that watermelons
there's a small mexican village which i visited many times it's called san
agustin walked on
and it has about fifteen hundred inhabitants
some of the individuals and so i'm not risking they grow watermelons and they
grow them down by the river
the river itself fertilizers the bank of the river so there's no
formal fertilizer they need to spend money on
and also in this village
wage rates are pretty well so quite commonly in individual might work an
errant saying a dollar or two a day
so you have a zero fertilizer costs and you have very low wage costs
and if a watermelon is going to be sold well when it is right they
take it from the river and they basically walk it up it's a short
ten or fifteen minute walk
and they bring it to harrison town where it's toll sold as if it would be sold in
the store
so for those watermelons all of the costs are lower we have low
cost
the capital costs are quite low in the labor costs are low
also the land costs are lower that weren't so many other useful things you
can do with that land
the key point here is that when you take that watermelon and set up a scheme and
it goes up for sale depending on the size of the quality but basically it
sells for in their range
a five to seven u_s_ dollars
for your convenience that's converting mexican pesos into u_s_ dollars of
course
but i find striking is the comparison between the watermelon inside augustine
and the watermelons as you find them in the u_s_ supermarket
watermelons in the united states
are formed using modern techniques they also may be transported from a state
like texas or florida
to wherever it is your supermarket is to super market itself has fairly high
expenses
they may be advertising the sale of watermelons there are refrigeration
costs
and much much more
the thing is the american retail infrastructure is producing and selling
a large number of watermelon so all of those costs are spread out over as i
said
aviary large number of watermelons
per watermelon those costs and that being sold out that what a watermelon
sells four in the united states
is that battle from five too
seven dollars again depending on exact size quality in time of year and that's
exactly the same price it sells for and sent augustine lopped off
the lesson here is one of the *** use of scale in the senate augustine economy
it's literally the case that most of the important costs or zero or near zero
in the united states you can see what appear
to be a large number of quite significant costs
but again when you spread out those costs over a large number of production
units
per unit those costs also are extremely small
you can't think of this as an object lesson in the efficiency of food systems
and food distribution and retail systems which can take advantage of economies of
scale