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APPENDIX

is ON units or OM units. The utility of the amount NM,
added to the supply ON, is something less than PN x NM,
and something greater than QM x NM. If N and M be very
near to each other, these two amounts approach to equality.
The utility of the amount of supply represented by NM is
represented by a rectangle on NM as base, and whose height
is between PN and QM. The area between any two
ordinates of the curve, though far apart, as PN and QM in
Fig. (i), may be regarded as built up of narrow rectangles
such as that just described, and of varying heights. In the
limit, the utility of the supply represented by NM in Fig. (i)
(added to a supply represented by ON) will be represented
by the area between the curve PQ, the ordinates PN and
QM, and the part of Ox between N and M. If the curve
could be carried on to cut Oy, the total utility of the supply
ON would be represented by the area between Oy, ON, NP
and the curve from P to the point of section with Oy. The
marginal utility of the same supply is measured by the
demand price PN. Thus the total utility and marginal
utility are contrasted as area and line, The marginal utility
is the rate at which total utility increases when supply begins
to increase from a given amount,
To the right, the demand curve may fall very near to
Ox. At points corresponding to very large supplies, then,
the marginal utility may be very small. If Dd cut Ox, as
at z in Fig. (ii), the marginal utility of a supply Oz vanishes.
But the total utility of that supply is represented by the
area between Ox, Oy and the curve, and may be very great.
It is certainly greater than for any supply smaller than Oz.
Large utility and small exchange -value, then, are by no
means inconsistent.
When the supply reaches the amount corresponding to
Oz in Fig. (ii), absolute satiety of demand for the commodity
in question is reached (see p. 24). No other meaning than
this can be reasonably assigned to an unqualified statement
that demand is saturated or that satiety has been reached.
A relative satiety, however, is reached when a supply of
some other commodity is preferred to further supplies of the
same commodity. Thus, in Fig. (iii), the intensity of demand
for two commodities may be represented by the two curves
Dd, and Dy, So long as PN is greater than OD,, the
first commodity alone will be demanded, if PN represent
the lowest grade of utility securable with the available means.
When, however, we reach a grade of utility such as OM,