Political economy

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Monograph

Identifikator:: 867647221

URN:: urn:nbn:de:zbw-retromon-93157

Document type:: Monograph

Author:: Chapman, Sydney John http://d-nb.info/gnd/123743141

Title:: Political economy

Place of publication:: London [u.a.]

Publisher:: Williams & Norgate [u.a.]

Year of publication:: 1912

Scope:: 1 Online-Ressource (255 Seiten)

Collection:: Economics Books

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82 POLITICAL ECONOMY outgoings equal price ; but it does not pay him to allow it to assume greater propor tions after this limit has been reached. We may, then, lay it down as an economic law that in every industry, be it agricultural, manufacturing, distributing or what not, the marginal expenses of each economic unit known as a business, or firm, would tend to equal the price of the commodity or service supplied. We need not trouble to enter here into the side complications which would have to be introduced into this exposition to meet the case of businesses producing things of several sorts, particularly as they raise no fresh theoretic issues of outstanding signi ficance. Let us go back for illustration to our boot-making industry and imagine that it comprises half a dozen firms. Let us suppose that it turns out in the aggregate 12,000 pairs of boots a year, for which output the demand price and the cost of production of the marginal firm are both 14s. Then if the industry is in a position of perfect equili brium, which implies that every one of its constituent parts is in a position of perfect equilibrium, each business must be of such a size that its marginal expenses are 14s., and its total expenses are less than its marginal

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