TRADE-l'XIOXS 17 



commodities, the total desire of the community for that par- 

 ticular kind of labour may be said to be greater in the second 

 case than in the first, though the number of labourers \vanted 

 is less. Again, if at one time 1,000 are willing to work at 20s. 

 and at another time none, or say only 100, will work at 20s., 

 while 900 are willing to work for 25s., the readiness to supply 

 labour will have diminished, though the number of labourers 

 remains the same. To avoid confusion, we will avoid the 

 equivocal words demand and svpply altogether, and speak only 

 of the number or quantity demanded and supplied as one pair 

 of corresponding ideas, and the desire to purchase and reluctance 

 to sell as a second pair of comparable magnitudes. 1 



1 We may now try to write the equation indicated by Mr. Mill. Let the 

 quantity demanded be called D, and the variable price J-. We know that 

 D is affected by the price, diminishing as the price increases, and may 



therefore write D = /"( ), where / is not a simple factor, but is a mere 



x 



symbol, indicating that D increases as the price diminishes, and is affected 

 by no other circumstance, an assumption which on any given market- day may 

 be true. Next, let S be the number which at the price x will be supplied 

 during the same time that the quantity D is bought. S will also vary with 

 the price, but it will increase as the price increases. We may therefore 

 write S= F(f), expressing the assumption that S is a function of the price, 

 and is affected by no other circumstance. When D is equal to S, we have 



the equation/( ) = -F(;r), by which the price x could be calculated, and would 







be determined, if the quantities demanded and supplied varied according to 

 any constant law, and merely in consequence of variation of prce. There 

 would then be only one natural and invariable value or price for each article. 

 But this equation does not express all that Mill says. If the desire for the 

 artic'e increases, the value tends to rise. The quantity demanded then is 

 not a mere function of the price. D must therefore be considered equal to 



some more complicated expression, such as /(./I + ), where A is some un- 



x 



known variable quantity. Again the readiness to sell at a given price may 

 ditrinish, and so diminish the quantity supplied, which is therefore not a 

 mere function of price. To express this we write S = F(B + x), where B 

 again is an unknown variable quantity ; thus when D is equal to S, we have 

 I he new equation, /(A + ) = F(B + x), an equation in which, so long as 



A and B and / and F were all constant in value and form, x would remain 

 constant, and would be fixed in terms of these magnitudes. If x were to rise 

 by what we may term an accident for a day or two above the value determined 

 by the equation, the first number would be smaller than the second, the quan- 

 tity supplied would be in excess of that required, competition would therefore 

 at once lower the price to its true value, as determined by the above equation, 

 so that all goods supplied might be sold. The consequence of a fall in 

 VOL. II. C 



