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 contraction
 in the supply of X than in that of Y. The marginal productivity
 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 productivity
 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 productivities
 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 breakdown
 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, provided
 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