Economic essays

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Monograph

Identifikator:: 1753623200

URN:: urn:nbn:de:zbw-retromon-136107

Document type:: Monograph

Title:: Economic essays

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1927

Scope:: viii, 368 S.; Ill., graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

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Title:: Elasticity of supply as a determinant of distribution / Paul H. Douglas

Collection:: Economics Books

ELASTICITY OF SUPPLY AS A DETERMINANT OF DISTRIBUTION 95 other. If, however, they are of different elasticities, namely of —.5 and —1.0, as in Figure 14, then the initial advance in the return per unit will of course cause a greater relative contrac- tion in the supply of X than in that of Y. The marginal pro- ductivity of X will therefore rise relatively to Y, but this rise in X will lead to a still further contraction in the quantity of X to amounts less than B. The decrease in the marginal produc- tivity of Y from P; will cause an expansion of the number of units beyond C. This, however, will be a movement in opposite directions, with the result that the marginal produc- tivities of X will be still further enhanced and those of Y still further depressed. But this will cause still less X to present itself and still more Y to be supplied, so that the process would almost seem to go on cumulatively with every indication of unstable equilibrium. Since this description in terms of successive processes has been for purely pedagogical purposes, while in actuality all of the forces would be operating simultaneously, the increase in the net effectiveness of industry would be a force serving to offset the diminished marginal productivity and hence preventing the supply of Y from expanding continuously with the cumulative break- down of equilibrium which has been sketched above. But there would seem to be no assurance that such would be the case. In conclusion, we may then say that if an advance in the technical or exchange efficiency of a society occurs, 1. The factor which increases least will secure the greater share of the benefits. The factor whose supply is negative will, pro- vided that the other factor is positive, gain more than if it were also positive. 2. The greater the difference between the elasticities of the factors, the greater the unit gain secured by the more inelastic. Fra

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