SUPPLY AND DEMAND 
75 
and the amount sold would be 1,300 tons. 
Were the output to increase to 1,400 tons 
the supply price of the marginal firm would 
be 3d. a ton above the market price, and, 
as this would mean that productive agents, or 
some of them at any rate, were working for 
inadequate remuneration, the output would 
contract. But, were the output 1,200 only, 
and the market price 16s. 8d. in consequence, 
all producers would be doing exceptionally 
well, and others, together with capital, would 
be attracted into the industry so that the 
output would expand. By “ output,” of 
course is intended output in some unit of 
time, say a year. 
Generalising we may say that the price of 
a commodity will be the price at which equal 
quantities are demanded and supplied, pro 
vided that a slight addition to the supply 
would mean a supply price above the demand 
price, and a slight reduction of the supply 
would mean a supply price below the demand 
price. There may be, but there is not likely 
to be, more than one such price. It is only 
possible when increasing returns rules, and, 
if it does, is least likely when demand is 
highly inelastic. 
A difficulty may have suggested itself to the 
reader. It would appear to follow from the