76

ECONOMIC PRINCIPLES

not be difficult to multiply instances requiring the application
 of the same general principles.
In discussing the general principles of value, the case of
a supply definitely limited in quantity, independent of the
willingness of men to devote time and effort to procuring
supplies, called for attention. It may be noted that, when
we consider the equilibrium of supply and demand at any
instant, though supplies could be, and will be, varied in the
course of time, perhaps a short time, the momentary
situation is that of fixed supplies, and the considerations
appropriate to a supply rigidly limited may be applied.
Corresponding to the case of a fixed quantity supplied is
the case of supply at an invariable price. When more than
one commodity is offered on these terms, a peculiar interest
attaches to some phases of the problems which result. As
the condition is approximately realised in the case of
railway or tramcar passenger services, additional light on
part of the preceding discussion may be obtained by giving
special attention to this aspect of the case. The fares may
be taken as fixed by authority or by custom, so that the
equilibrium of supply and demand must be effected, if at all,
by providing just that amount of accommodation which is
called for at the fares fixed. The amount of supply must
be adjusted to the demand at the price, which is not open to
adjustment. As in other cases, we shall find the marginal
utility of the commodity (Z.e. of the service rendered) to be
measured by the price. The questions affecting supply are
limited to those relating to whether the service can be made
to pay at the fares fixed. If not, the hypothesis, that only
such supplies of goods will be forthcoming as are remunerative
 to producers, would lead to the conclusion that the
service will not be rendered at all if the fares are too low.
If the fares cannot be raised, the supply must either be
entirely lacking or be adequate to the demand at the fixed
fares, or else there may be no balance of supply and demand.
The latter condition may be illustrated by the case of cabhire
 where fares are fixed by authority, The supply of
available cabs may readily be conceived to be less than
sufficient to meet the demand at the authorised fares. and