240 



AGRICULTURAL PRICES AND VALORIZATION 



The figure (Fig. 47) correctly shows the relation of value to cost 

 of production. Price fixed on cost of production alone therefore 

 may work disaster by ignoring the demand side. When supply 

 and demand are permitted to work, unfettered by artificial influ- 

 ences, governmental or otherwise, then high prices are the cure 

 for high prices (by affecting both the supply and demand side); 

 and low prices are the cure for low prices (by affecting both the 

 supply and demand side). 



I 



u e. 



margin a \ 



uti h'fy 



Supply 



of 



'ion 



D 



em an 



FIG. 47. Relation of value to cost of production and to demand. Value depends on mar- 

 ginal utility. Marginal utility depends on supply and demand. Supply depends on cost 

 of production. Demand depends on utility. Any change, therefore, in supply or demand 

 affects value. Any change in cost of production or utility affects supply and demand, and 



hence value. 



Conclusions. The question of a fair price is coming more and 

 more to be a social question. Among our social forces to-day 

 are government, public opinion, economic organizations of pro- 

 ducers and consumers, the press, and so on. The metropolitan 

 press at present sheds more heat than light on the price question, 

 catering to the supposed wants of its readers. However, a few 

 big city dailies now maintain a market information service for the 

 honest purpose of educating the consumers in the problems of, 

 markets and prices. Here is a vast opportunity for service leff< 

 untouched by most city papers, however. Public opinion, unless 

 fed on the truth, is a force for evil as much as it is a force for good) 1 

 The government may do much, and in fact is doing much, to spre;n 



