70 ECONOMIC PRINCIPLES

fixing the price of a commodity at any given level, depends
on the amount which can be disposed of at that price-level,
The price per unit, multiplied by the number of units sold,
gives the total remuneration, and the excess of this over the
expenses of producing the same number of units is the
amount of the profit. Now the expenses of production, as
we have seen, are not usually unchanged, either as a total,
or in proportion to the amount produced, as that amount is
varied. Thus the discovery of the scale of output, and of
sales, which will yield the greatest total profit, is a matter of
importance. A smaller profit per unit, reaped from a larger
number of units, may easily afford a greater total of profit
than would be secured from a smaller output, even with a
higher profit on each unit of output. The fact, then, that
high prices restrict sales, is a reason why a monopolist
should not find his interest in extravagantly high prices.
The further fact, that the majority of commodities can be
replaced more or less effectively by other commodities, gives
point to this consideration, since the complete control of the
supply of any one commodity may not be, and often is not,
the complete control of the means of rendering the service,
or affording the satisfaction, which the use of that commodity
commonly renders or affords, Where substitutes are readily
found, a slight rise of price may greatly diminish sales, and
make serious inroads into profits as a consequence. Even if
substitutes are not well known, the fixing of an extravagant
price for a commodity may induce a search for substitutes,
or for means of adapting some known article to serve as the
substitute in question; or it may lead to a substitution of a
new form of gratification for one which has been subjected
to the restraint of a high price. With a view to future
possibilities, then, as well as in consequence of actually
present conditions, the level of price which will yield the
greatest, and most permanent, profit to the monopolist may
be not far above the level of price which competition would
secure, It is claimed, further, that economies, associated
with concentration of the control of production, often afford
an abundant profit to a monopolist without necessitating the
elevation of the price above the level at which competition