THE INCIDENCE OF TAXATION 291

able to contract with his new landlord on terms practically
transferring the burden to him. This will be the more likely
if a more lightly taxed district offer alternative accommodation.
Inasmuch as some tenants are moving at any particular
period, the influence of the competition of the houses of that
other district will be in operation all the time, but circumstances
 hinder the perfect establishment of a market price for
house-hire, and thus the incidence of a tax such as that under
consideration is very greatly affected, for a considerable time,
by its original impact,
In the case of commodities readily marketable, the transference
 of the tax burden is much easier and simpler. The
competition of dealers is active. If any possess stocks of a
commodity newly taxed, there is no compulsion arising out
of competition which can prevent them from offering these
goods at the same price as those which competitors must ask
for new supplies, on which the tax must be, or has been, paid.
Thus the consumer finds that the whole supply available is
burdened with the tax as well as its expenses of production.
In so far as the rise of price reduces demand, a modification
may result. If cost of production per unit be unchanged for
a reduced scale of output, the effect of the tax is to lead to a
rise of price equal to the tax, and a reduction of output such
as to adjust the supply to the diminished demand which results
from the rise of price. If the cost per unit fall with a reduction
 of the scale of production, the price will not be raised to
the full extent of the tax. The supply will he reduced so
as to correspond with the reduced demand, and the economy
in production which results will help to cover the tax, the
remainder being covered by the rise in price. Should the
taxed commodity be one of which the cost per unit falls as the
scale of production is enlarged, the resulting effect on price
will depend on how the representative producer (see p. 60)
is affected by the tax. It is conceivable that the tax may
be such a disadvantage to small producers that it results
in enlarging the scale of production of the representative
 firm. In that event the effect on price would be
that of the case last considered. If the representative firm
maintain the same scale of production after the taxation of