ELASTICITY OF SUPPLY AS A DETERMINANT OF DISTRIBUTION 89 
of which the same money price is paid. For each factor there 
can be chosen arbitrary units which will bring it on the scale. 
The scales represent the relative rates of increase in the supplies 
of the two factors. A given distance represents equal rates of 
change in their respective supplies or equal rates of change in that 
which is paid. It is therefore a double logarithmic scale which 
we are using. 
Returning to the situation illustrated in Figure 7, it is apparent 
that an increase in the effectiveness of industry and the rise in 
the payment to both X and Y from P to P; would cause a 
proportional increase in the quantity of each. But sinee both 
factors would increase at the same rate, the proportions between 
X and Y would tend to 
be unaltered and hence 
their relative marginal 
productivities would be 
changed if at all from 
conditions affecting the 
productivity curve, not 
the supply curves. When 
the elasticities of supply 
are equal, the two factors 
tend to share equally, in 
terms of both unit and 
proportional returns, in 
the gains resulting from 
an increased effectiveness 
of industry. 
We turn now to a slightly more complicated and more interest- 
ing case, namely that where the supply of the factor X is com- 
pletely inelastic and that of the other Y has positive unit elas- 
ticity. This may be represented by Figure 9 where the line A S 
represents the inelastic factor X and that of SS; the factor Y with 
an elasticity of 1.0. The supplies of both when in an original 
state of equilibrium are represented by A and the price paid 
to each by P. The initial increase in the rate of remuneration 
to each from P to P; will create a difference in the relative 
supplies of the factors. That of X will not increase at all since it 
is by hypothesis absolutely inelastic, but that of Y will tend to 
expand at a ratio equal to the relative increase in return per unit. 
S: