SUPPLY  AND  DEMAND

75

and  the  amount  sold  would  be  1,300  tons.
Were  the  output  to  increase  to  1,400  tons
the  supply  price  of  the  marginal  firm  would
be  3d.  a  ton  above  the  market  price,  and,
as  this  would  mean  that  productive  agents,  or
some  of  them  at  any  rate,  were  working  for
inadequate  remuneration,  the  output  would
contract.  But,  were  the  output  1,200  only,
and  the  market  price  16s.  8d.  in  consequence,
all  producers  would  be  doing  exceptionally
well,  and  others,  together  with  capital,  would
be  attracted  into  the  industry  so  that  the
output  would  expand.  By  “  output,”  of
course  is  intended  output  in  some  unit  of
time,  say  a  year.
Generalising  we  may  say  that  the  price  of
a  commodity  will  be  the  price  at  which  equal
quantities  are  demanded  and  supplied,  provided ­
  that  a  slight  addition  to  the  supply
would  mean  a  supply  price  above  the  demand
price,  and  a  slight  reduction  of  the  supply
would  mean  a  supply  price  below  the  demand
price.  There  may  be,  but  there  is  not  likely
to  be,  more  than  one  such  price.  It  is  only
possible  when  increasing  returns  rules,  and,
if  it  does,  is  least  likely  when  demand  is
highly  inelastic.
A  difficulty  may  have  suggested  itself  to  the
reader.  It  would  appear  to  follow  from  the