If the plants are widely spaced then not all of the land area is covered by leaves and much of the light available for photosynthesis is not intercepted.
If the plant density is increased to allow all of the sunlight to be intercepted than a positive yield increase will occur.
As the space between the individual plants decreases then neighbouring plants begin to interfere with each other (known as intraspecific competition) and yield from the individual plant will decrease, although the crop yield will increase.
This is because, despite each plant not fulfilling its full potential production, a more efficient use of the limiting factors for growth is being made by the crop. This is particularly true with respect to the efficiency of utilisation of sunlight and the ability of the crop canopy to capture more light at higher plant populations.
As the population increases yield response will start to diminish until a plateau is reached when no further yield response to plant population can be achieved.
In biological terms the optimum plant population is at the point where the plateau starts, in practice the optimum is lower than this when seed costs are taken into account.
So what is the optimum plant population? Here in Ukraine I target 400ppm until the end of the September then increase to 500ppm until mid October when I will stop planting.