SUPPLY  AND  DEMAND

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ually,  and  all  specialism  means  economy  in
production.  Moreover  the  augmented  industry
would  offer  a  larger  market  to  the  subsidiary
industries,  which  are  the  industries  engaged
in  meeting  its  wants  for  appliances  and  accessories, ­
  and  they  would,  therefore,  be  able  to
supply  it  with  its  requirements  more  cheaply.
Moreover  it  is  possible  that  transportation
in  connection  with  the  industry  would  so
develop  that  the  cost  of  carriage  in  relation  to
the  industry  would  be  reduced.  Enough  has
been  said  to  suggest  the  possibility,  which  will
frequently  be  found  borne  out  by  fact,  that
with  the  expansion  of  an  industry  marginal
cost  might  fall.
But  just  as  a  new  firm  may  have  beneficial
effects  upon  existing  firms  and  depress
their  expenses,  so  it  may  have  deleterious
effects  upon  them  and  force  up  their
expenses.  Consider  the  case  of  farming  in
a  densely  packed  country.  An  increased
demand  for  farm  products,  meaning  an  increase ­
  of  the  farming  classes  and  of  the
capital  devoted  to  farming,  would  compel
cultivators  to  work  the  old  land  more  intensively ­
  and  bring  new  land,  inferior  to  the
worst  of  the  old,  under  the  plough.  So  costs
would  rise.  Of  course  these  tendencies  to  an
enhanced  supply  price  might  be  counteracted