SUPPLY AND VALUE 61

which is the basis of the estimate of whether such provision
of equipment promises profit, is the cost incurred by
businesses which are “representative,” in regard to magnitude
of operations, and in access to facilities connected with the
industry, either as matters of internal business organisation
or of general industrial organisation. If the supply of producing
 facilities is to correspond with the demand for the
commodity, the value of the commodity must be (anticipated
to be) on the level of the cost of production thus conceived.
The momentary supply is dependent on the actual means of
production available, the adjustment of those means to
demand depends on the relation of value to cost of production
interpreted on the lines just laid down.
Further, if conditions of increasing return prevail, and
numerous competitors are engaged in the supply of the
goods concerned, a temporary equilibrium implies the
attainment of conditions corresponding to those which guide
the investment of capital as just contemplated. If an
equilibrium exist, there cannot be a sufficient reason for
modifying the prevailing conditions of supply. The representative
 producer will, therefore, be under no inducement
either to increase or to decrease his scale of production.
This can only be interpreted to mean that there is realised
in fact an output, and a profit, corresponding to that in view
of which the investment was undertaken.
As has been stated above, in most cases where decreasing
costs accompany an increase in the scale of operation of an
Individual producing establishment, a point of maximum
economy exists corresponding to the most complete utilisation
 of the appliances provided, and the fullest employment
of all the capacities for work and for management which are
available. By the nature of the case, the extension of output,
 by a small amount, at this point, would mean additions
to expenses just in the proportion of the addition to output,
A large change would mean additions to expenses in greater
proportion than the addition to the output. Just at the
turning point from decreasing to increasing costs, that is, at
the point of maximum economy, the marginal expenses per
anit become identical with those average expenses which