SUPPLY AND DEMAND 
69 
and constant returns must not be confounded 
with the so-called laws of increasing, de 
creasing, and constant returns. Let us confine 
our attention for the. moment to increasing 
returns and remember that all that is affirmed 
about it applies mutatis mutandis to decreasing 
and constant returns. The conception of 
increasing returns has been explained. Now 
the law of increasing returns is best interpreted, 
in my opinion, as defining the conditions under 
which increasing returns with reference to 
industries are met with. There is not yet 
among economists complete agreement upon 
this matter ; but in a brief introduction to 
economic theory I must be content to put for 
ward my own views, which are those of others 
also, as regards the most appropriate inter 
pretation, while warning the reader that they 
are not universally accepted I should take it, 
then, that the law of increasing returns defines 
the conditions under which increasing returns 
are met with in industries. These conditions 
can be easily formulated, but we may formu 
late them at different levels of abstraction ; 
and it goes without saying that the more 
complete the abstraction the more universal 
will the law be. It will probably be a con 
venience to recognise two laws, namely, the 
abstract law and the realistic law. I shall