82 



POLITICAL ECONOMY 



It has lately been suggested that the manner of conducting 

 bargains will alter the market price of the commodity ; that, 

 in fact, open market, an auction, and a Dutch auction, might 



10 20 SO 40 50 60 70 



FIG. 5. Second Law of Supply and Demand. 



80 90 



Shillings. 



Pig. 5 shows probable effect of increase in the whole supply. 



The dotted line on right shows probable effect of increasing the whole supply to 1,800 



quarters. 



The price at which whole supply would be sold rises to 95s. 

 The price at which the whole supply would be bought falls to 10*. 

 The market price falls to 47s. 



The price below which no sale could take place falls to 38*. 

 The price above which no sale could take place may remain unaltered. 

 The quantity which will be sold rises to 870 quarters. 



produce three different market prices. The peculiarity of an 

 auction is that the supply is constant at all prices, down to a 



Fiq.6. 



200 



Shillings. 



FIG. 6. Second Law of Supply and Demand. 



Fig. 6 shows probable effect of an increase in the purchase fund. 



The dotted demand line shows the probable effect of increasing the purchase fund. 



The price at which the whole supply would be sold may be unaltered. 



The price at which the whole supply would be bought rises to 30*. 



The market price rises to 63*. 



The price below which no sale would be effected may remain unaltered. 



The price above which no sale would take place rises to 65*. 



The quantity which will be sold rises to 850. 



