E

SUPPLY  AND  DEMAND

65

Were  it  to  receive  continuously  less  than  7d.
a  yard  for  its  output  the  pay  of  some  at  least
of  its  agents  would  have  to  be  reduced  to  an
inadequate  level,  and  they  would  consequently ­
  be  disposed  to  seek  some  other
occupation,  and  even  if  they  did  not  the  gaps
in  their  ranks  created  by  time  would  wait  in
vain  to  be  filled  up.  Hence,  we  may  conclude
at  once  that  the  supply  price  for  a  given  output ­
  must  tend  in  the  long  run  to  equal  at  least
the  highest  of  the  costs  involved  in  the  attainment ­
  of  that  output.  And  it  cannot  for  long
be  more.  Were  the  demand  price  for  100,000
yards  of  braid  per  year  more  than  7d.,  and
were  the  price,  under  the  influence  of  the
competition  of  the  buyers,  forced  up  to  the
demand  price,  as  it  would  be,  productive  agents
would  be  attracted  to  the  industry  because  in
such  circumstances  producers  and  capital
in  the  industry  would  be  receiving  more  than
normal  remuneration.  So  we  may  suppose
that  another  firm  would  be  added  to  the
four  already  in  existence.  Premise  that  the
cost  of  production  of  the  fifth  firm  is  7|d.
If  this  were  the  highest  cost  under  the  new
conditions,  the  new  firm,  which  we  shall  call
E,  would  be  the  marginal  firm  under  the  new
conditions  and  the  supply  price  would  reach
7£d.  for  an  output  of  five  firms.  Let  us  take