SUPPLY AND DEMAND 79 
expenses, apart from his own remuneration, 
would vary with the variation in the extent 
of his firm’s operations. The firm, suppose, 
produces boots of one sort. If it turned out 
very few pairs a year the expenses of produc 
tion would certainly be high, because for a 
tiny output very little machinery could be 
used and very little division of labour could be 
introduced. Successive enlargements of out 
put by equal increments would, therefore, 
entail additions to the total expenses of 
production which for a time would become 
continuously less and less. These additions 
to the total expenses of a business (involved 
in its expansion) may be called the marginal 
expenses of a business; which are to be 
distinguished from marginal expenses, so- 
called, meaning the expenses per unit of 
output of the marginal firm. 
Let us have figures to prevent any mis 
apprehension. Say 1000 pairs of boots a 
year are manufactured and that the aggregate 
expenses, including interest on capital, wages, 
cost of material, and everything with the 
exception of the employer’s earnings for him 
self, amount to £1000. Let the size of the 
business increase so that the output becomes 
1001 pairs of boots, and let the addition to 
the total expense be 15s. This may be called