81-POLITICAL

  ECONOMY

feasible  to  do  so,  because  after  the  supposed
change  in  demand  it  would  be  profitable  for
them  to  do  so.  But  at  the  same  time  the
rise  in  price  would  render  it  possible  for  the
would-be  employer  just  excluded  previously
to  make  sufficient  in  the  industry  to  induce
him  to  venture  his  capital  in  it.  So  a  new
position  of  equilibrium  would  ultimately
be  attained  with  seven  firms  instead  of  six,
all  having  a  marginal  cost  higher  than  the  old
marginal  cost,  in  the  absence  of  effective
tendencies  to  increasing  returns  ;  and  there
would  be  a  new  marginal  firm  with  a  surplus
left  over  for  its  employer  which  was  just  about
adequate  from  his  point  of  view  to  make  it
worth  his  while  to  manufacture.  The  new  output, ­
  we  may  imagine,  would  be  15,000  pairs  of
boots,  and  the  price,  say  14s.  3d.,  would  tend
to  be  the  marginal  expense  in  every  one  of  the
seven  firms.
One  possibility  reviving  a  consideration
advanced  earlier  in  the  present  chapter  must
be  allowed  for,  and  this  exposition  is  complete. ­
  Marginal  business  costs  have  been
represented  as  rising  with  a  growth  of  the
industry.  Such  a  representation  is  entirely
right  as  regards  what  would  immediately
happen.  But,  as  we  have  already  learnt,  the
appearance  of  a  new  firm  might  ultimately