74

POLITICAL  ECONOMY

price  only  at  which  as  much,  or  as  little,  as  is
wanted  will  be  produced.  But  when  decreasing ­
  returns  rules  for  the  larger  output  a  higher
price  must  be  paid,  and  when  increasing
returns  rules  the  larger  output  brings  such
economies  that  the  supply  price  falls.  Supply
prices  in  conjunction  with  demand  prices
settle  the  market  prices  of  reproducible  things.
And  they  also  settle  the  prices  of  nonreproducible
  things,  but  in  this  latter  case
“supply  prices”  have  no  reference  to  cost
of  production.  They  must  be  taken  to  mean
merely  the  prices  at  which  owners  will  part
with  different  quantities  of  the  non-reproducible ­
  things  in  question  in  their  possession.
Let  us  put  the  relations  between  demand
prices  and  supply  prices  in  a  table  relating
to  some  industry  or  other.
Output  in  Demand  Supply
tons.  price.  price.

In  this  case,  to  which  decreasing  returns  has
been  supposed  to  apply,  price  would  be  16s.  6d.,

1,000
1,100
1,200
1,300
1,400
1,500

17/6
17/-16/8

16/6
16/4
16/-16/2


16/3
16/5
16/6
16/7
16/9