ELASTICITY OF SUPPLY AS A DETERMINANT OF DISTRIBUTION 95 
other. If, however, they are of different elasticities, namely of 
—.5 and —1.0, as in Figure 14, then the initial advance in the 
return per unit will of course cause a greater relative contrac- 
tion in the supply of X than in that of Y. The marginal pro- 
ductivity of X will therefore rise relatively to Y, but this rise 
in X will lead to a still 
further contraction in the 
quantity of X to amounts 
less than B. The decrease 
in the marginal produc- 
tivity of Y from P; will 
cause an expansion of the 
number of units beyond 
C. This, however, will be 
a movement in opposite 
directions, with the result 
that the marginal produc- 
tivities of X will be still 
further enhanced and 
those of Y still further 
depressed. But this will 
cause still less X to present itself and still more Y to be supplied, 
so that the process would almost seem to go on cumulatively with 
every indication of unstable equilibrium. 
Since this description in terms of successive processes has been 
for purely pedagogical purposes, while in actuality all of the 
forces would be operating simultaneously, the increase in the net 
effectiveness of industry would be a force serving to offset the 
diminished marginal productivity and hence preventing the supply 
of Y from expanding continuously with the cumulative break- 
down of equilibrium which has been sketched above. But there 
would seem to be no assurance that such would be the case. 
In conclusion, we may then say that if an advance in the 
technical or exchange efficiency of a society occurs, 
1. The factor which increases least will secure the greater share 
of the benefits. The factor whose supply is negative will, pro- 
vided that the other factor is positive, gain more than if it were 
also positive. 
2. The greater the difference between the elasticities of the 
factors, the greater the unit gain secured by the more inelastic. 
Fra