CONTENTS

Zz

PAGES
conditions of supply on rates of exchange under primitive conditions of
barter. Comparative efficiency of labour in different occupations
conditions the terms of exchange, unless transfer of labour and capital
between occupations is hampered. The problem of distribution
involves essentially the conditions of valuation above contemplated.
Market valuations, and the influence of money on them. The
nature of some goods restricts dealings in them to local markets, but such
conditions are subject to change. Goods sold by sample, or by simple
description, if easy of transport, may be dealt in in world-wide markets.
A good market organisation establishes a uniformity of price, for the
same commodity, throughout the market

32-41

CHAPTER 1V

SUPPLY AND VALUE

AUTHORITIES

CARNES . ‘Some Leading Principles of Political Economy,” Part I.
I. S. MiLL ““Principles of Political Economy,” Book III. Chanters
III. IV.
MARSHALL “Principles of Economics,” Book V. Chapters IIL. IV.
V. XI. XIL

The limitation of supply is variously conditioned. (2) Supply fixed in
amount, Adjustment of price so that the demand is for that amount.
(6) Limitation of supply due to monopoly. (¢) Limitation of supply
due to expense of procuring further supplies. Expenses of production
an index of the degree of scarcity. Marginal expenses of production ;
their variation with scale of production. The expenses of individual
producers and those of the industry as a whole. Competition assumed.
(i.) Constant expenses of production. The supply will have a marginal
utility measured by these expenses. Greater or smaller supply not
sustained. (ii.) Diminishing returns, Value measured by marginal cost
of production. Utility and cost of co-ordinate importance. Expense
incurred in anticipation of value to be realised. Changing conditions
of supply, and consequent changes of value. (iil.) Increasing returns.
When demand is inexpansive tend to monopoly, but with expanding
demand competition may persist. Limits to indefinite increase of
returns. Equilibrium of aggregate supply and demand: a stable
position assured. Effects of increase or decrease of demand. When
the latter is permanent, the adjustment attained after ruinous competidon,
 Prime cost and total cost. The representative producer. His
costs a measure of the obstacles to increase of aggregate supply. The
maximum economy of operation not attained in dull times. Representative
 costs not generally marginal costs. Résumé of relation of
value to expenses of production and to utility. Normal value changes
when the conditions, relative to which it is normal, change .

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