so

POLITICAL  ECONOMY

the  marginal  expense  in  the  business,  for  it
is  the  addition  made  to  the  total  expense  in
the  business  when  the  output  is  increased  by
one  pair  of  boots.  Let  the  output  of  the
business  continue  to  increase  by  increments
of  one  pair  of  boots  each  ;  then  there  would
be  corresponding  additions  to  total  cost
(called  marginal  costs  or  expenses  as  we  have
seen)  say,  14s.  lid.,  14s.  10d.,  14s.  8d.,
14s.  9d.,  and  so  on  successively.
If  we  watched  such  a  gradual  growth  of  a
business  or  firm  from  an  insignificant  size  it
would  be  found  that  marginal  costs  would  fall
at  first,  for  reasons  already  advanced.  Now,
can  this  fall  in  marginal  expense  go  on  indefinitely ­
  ?  The  obvious  and  correct  answer
is  that  it  cannot  ordinarily.  If  it  did,  the
chances  are  that  by  this  time  each  industry
would  have  become  the  monopoly  of  a
single  firm,  which  owed  its  position  to  the
fact  that,  having  once  got  a  start,  it  was
enabled  to  undersell  its  competitors  until
there  were  no  competitors  left  to  undersell.
The  fall  in  marginal  cost  cannot  ordinarily
continue  without  end,  because  the  scope  for
further  specialism  and  use  of  machinery
afforded  by  further  extensions  of  the  business
would  tend  to  be  neglected  by  the  over-taxed
brain  of  the  ultimate  head  ;  and  any  economy