SOME SPECIAL PROBLEMS OF VALUATION 6g

A case having some features of close analogy with the
preceding is that of alternative demand or supply, where the
principle of substitution applies. Where a service of a
particular kind can be rendered by either of two or more
commodities, the influence of competition is to direct demand
 toward that commodity which renders the service
most cheaply or efficiently, or most cheaply relative to the
efficiency. This replacement, of one mode of doing a thing
by another, modifies the demands for the different commodities,
 and, if the process be conceived as carried to its
logical limit, that limit will be characterised by such prices
of the commodities that the satisfaction or service is purchased
 equally cheaply by whichever commodity it is
rendered. The applications of the principle of substitution
are innumerable. Light, for example, may be secured by
the use of candles, oil, coal-gas, or electricity, and the prices
of the several supplies will be affected by the cheapness and
convenience of the other sources of artificial light. The
competition of coal-gas and electricity is a modern phenomenon
 of great importance, and has not been confined to
rivalry in cheapness, but has affected the development of
methods of securing increased brilliancy from coal-gas by
means of incandescent lighting. The wide application of
the principle of substitution will secure further illustration
in due course, as cases where it is important come up for
consideration in subsequent discussions.
The case of composite demand, that is to say, of mady
uses for one and the same commodity, presents a very
common case, but one so closely similar to the ordinary
case, of many consumers demanding the same commodity
for like uses, that no words need be spent in developing the
case of requirements for unlike uses.
Our next special case of value will be that of a monopaly
of supply. The complete control of supply suggests to the
unreflecting a power of arbitrarily determining price. That
power is, undoubtedly, a necessary concomitant of this
condition, but we need to consider what affects willingness
to put the price at a higher or lower level as well as what
affects the power to do so. The profit to be secured, from