134 Dr. WHEWELL, ON THE MATHEMATICAL EXPOSITION OF 



of supply, or the rate of change in the money demand for a change of price. The classes 

 occur as »» is 1, is between 1 and 0, is 0, or is negative. So far as these classes of com- 

 modities are exemplified by the instances above adduced, we may call them Conventional 

 Necessaries, General Necessaries, Articles of Fixed Expenditure, and Popular Luxuries. For 

 the first class, the quantity sold is the same whatever be the price. For the second class, 

 when the price rises the quantity sold diminishes, but the money demand increases. For 

 the third class, the money demand is always the same, and therefore the quantity sold is 

 inversely as the price. For the fourth class, when the price falls the quantity sold is 

 augmented, so that the money demand also is augmented. 



21. I suppose that there are no commodities of which a greater quantity would be 

 sold if the price were increased, and a less quantity sold if the price were diminished. It 

 is conceivable that this might be, as a matter of caprice or fashion. For instance, we may 

 conceive that diamonds might in some way (by the discovery of abundant mines or the like) 

 become so common as to grow out of use, so that a less quantity might be sold than at 

 present. If there should be such commodities, they would correspond to values of m 

 greater than 1. 



22. If it were possible to arrange commodities according to the value of to, the specific 

 rate of change, (as is done hypothetically for the sake of example in the above instances) so 

 that we should for every quantity know the value of to, we might solve a great variety of 

 problems respecting the variations of price, of demand, and of supply, so far as these quan- 

 tities depend on each other. And so far as the formulae are applicable, we have the 



equations 



1 + mx 



p'=p(l+x), p'q = pq(l +mx), q = q 



1 + x 



23. It is well observed by Mr. J. S. Mill (Polit. Econ. i. 529) that instead of saying, as 

 writers have often said, that the price depends upon the ratio of demand and supply, we ought 

 rather to say that the price depends upon the equation of demand and supply. And we 

 may apply the term, the equation of demand and supply to the equation 



p'q' = pq(l + mx). 



24. As examples of the above formula?, let it be supposed that an increase of — in the 



supply (the whole being sold) produces a fall of - in the price. 



5 



TO 

 1 



™, J j 5 U 3 



Then x = , and — — = — , whence to = - . 



5 1 10 5 



1 -- 

 5 



This being the case, what effect on the price would be produced by an increase, and what 

 by a diminution, each of - , in the supply ? 



