PRICES OF PRODUCTS 



are satisfied, the pain of exertion becomes great 

 enough to more than balance the possible pleasure 

 which might be produced by consuming the prod- 

 ucts of further exertion. So long as there is an 

 unsatisfied desire for an article, that article will 

 have some value placed upon it. The relative in- 

 tensity of the buyer's desire for an article deter- 

 mines how highly he will value it, and what price 

 he will be willing to pay for it ; but the price which 

 must be paid determines how completely the want 

 will be satisfied, the higher the price the more 

 intense will be the desire which will be left unsat- 

 isfied. 



On the other hand the natural facilities for in- 

 creasing the supply will determine how high the 

 price must be before the producer can afford to 

 increase the supply. Marshall says : "For long 

 periods the supply price is that which is just 

 needed to call forth those new investments of 

 capital, material and personal, which are required 

 to make up a certain aggregate volume of produc- 

 tion." 1 The lower the price at which the producer 

 can, with profit, add an increment to the supply, 

 the greater the total supply that will be put upon 

 the market and the more generally it will be con- 

 sumed; but the greater the amount of an article 

 consumed, the less intense is the desire for it and 

 the less highly it is valued. Thus it is that the 

 marginal utility, or the intensity of the last want 



1 Alfred Marshall, Principles of Economics, third edition, 

 p. 448. ! 



