MONOPOLY 
111 
entailed by the manufacture of the addition 
to his output represented by the foreign sales, 
for if it did the kind of dumping which we 
have in mind would mean buying half- 
crowns at two shillings apiece. But cost 
of production may be understood as the 
average cost (cost per unit of output) of 
the whole of the industry’s output. Now, 
foreign sales beneath cost of production so 
understood will prove worth while, provided 
that the foreign price is in excess of the 
addition made to the aggregate costs of the 
industry by the production of what was 
exported, when this addition to cost is 
reckoned per unit of the exported output. 
The implication is that the industry is 
subject to increasing returns. The seemingly 
unremunerative foreign sales pay because 
of the benefits resulting from the increasing 
returns. Making regular provision for the 
foreign market necessitates enlarging the 
industry and the enlarged industry brings 
about in the long run a lower cost of produc 
tion per unit of what is turned out. The 
seeming loss in the distant markets may be 
more than recouped by the reduction in the 
cost of things sold on favourable terms at 
home.