SOME SPECIAL PROBLEMS OF VALUATION 71

would fix it. While these theoretic considerations are of no
small importance, it is an obvious fact that the power to
advance prices acts as an inducement to do so in many
cases, including some where such an advance brings into
play the influences to which reference has been made above,
and is in reality detrimental to the pecuniary interests of the
monopolist. A rise in price seems so much more simple
and direct a method of securing increase of profit than the
laborious exhaustion of possibilities of economy in production,
 or appears to offer such an easy addition to gains from
these sources, that monopolistic control of supply is more
generally associated, both in practice and in the thoughts of
most persons, with a rise of prices than with a fall. The
absence of that restraint on profit which arises from the
competition of other producers of the same commodity, and
of the stimulus to seek, in improved methods of production,
the profit which competition prevents from being secured
from elevation of price, operate so generally to the prejudice
of the consumers, that the wastes of competition are less
regarded than the dangers of monopoly, even combined with
the economies of centralised production.
If we assume that the monopolist seeks to secure the
largest possible net profit, he will seek to arrange his supply
and price at the amounts such that either a smaller supply
with a larger profit per unit, or a larger supply with a smaller
profit per unit, would reduce the total of profit. In the one
case the increase of profit per unit is outweighed by the
decrease of the amount on which profit is earned, in the
other the increase in the amount on which profit is secured
is outweighed by the decrease in the profit on each unit
Such a point must exist, since the profit on an insignificant
amount of sales is clearly insignificant unless the price can
be imagined increased without limit, while, at the other
extreme, the fall in marginal utility of the goods must at
some point bring the marginal utility below cost of production,
 and thus mark a scale of supply at which profit would
vanish. Between the extremes of the vanishing of profits,
through disappearance of all demand at an extremely high
price, and through decrease of demand-price through ex-