84 POLITICAL ECONOMY 



Except in the shape of the supply curve, which is here always 

 known, these figures do not differ from the typical Fig. 1. And 

 the market price here, as before, is that at which the supply and 

 demand curves cut. 



This point is ascertained in auctions by the competition of 

 buyers alone, whereas in open market sellers as well as buyers 

 compete. 



In both forms of auction buyers judge whether at a given 

 price the demand is above or below the supply, partly by the 

 quickness of the bids, and partly by their former experience and 

 general knowledge. 



In a Dutch auction buyers are as likely at first tentatively to 

 let the seller offer below the market price as to close with him 

 above that price. 



In an English auction, buyers are as likely at first to run up 

 above the market price as to stop bidding below it. 



It is only by experience of former markets, and a considerable 

 number of tentative transactions, that the theoretical price is 

 approached. 



The device by which Mr. Thornton has made it appear that 

 in a Dutch and English auction there might be two market 



10 20 SO 40 60 60 70 *0 Shillings. 



FIG. 9. Thornton's Case, in which the price is indefinite between two limits. 



The supply at an auction, unreserved, is 800 quarters. 

 There is a demand for exactly 800 at 15*., 20,?., and all intermediate prices. 

 The supply and demand curves coincide between 15*. and 20,!., and the market price is 

 not defined within those limits. 



prices, is to assume that the demand at prices in the neighbour- 

 hood of the market price is constant at all prices ; that the same 

 number, and no more, fish would be bought at 18s. as at 20s. In 



