92 POLITICAL ECONOMY 



some fixed rate of profit. The cost of production varies with the 

 quantity to be produced, because as more is wanted a higher 

 price is generally required to tempt more capital and more labour 

 into the given walk. The ordinates of the supply curve, although 

 therefore truly representing cost of production, ultimately depend 

 greatly on men's will or choice, and may vary and do vary 

 immensely with variations in the quantity required. 



Occasionally a commodity may be dearer to produce in small 

 quantities than in large, and its supply curve may have two 

 I ranches with two possible prices, as in Fig. 13. 



The form and character of the average supply curve for many 

 iraterlals might be determined by statistics with fair approxi- 

 mation. 



The intersection of the average supply and average demand 

 curve fixes the probable average price. 



Average demand curves will in general approach horizontal 

 lines, and average supply curves will in general approach ver- 

 tical lines. 



Only in the case in which the supply curve is a vertical line 

 at one price is it strictly true that the cost of production deter- 

 mines price without reference to demand ; but for all those cases 

 in which the cost of production varies little with the quantity 

 produced, the statement is approximately true. When the 

 average supply curve is a vertical line, it is strictly true that 

 demand has no influence on the average price, but only deter- 

 mines the quantity which will be sold. 



These curves then regulate the price of manufactured articles, 

 among which gold and labour may be both included. 



In a given market, the price then and there will be that at 

 which the quantity wanted and quantity for sale are equal. 



Increase in the whole quantity for sale will generally in- 

 crease the quantity for sale at all prices, and so lower prices, 

 and vice versa ; while increase in the funds applicable to purchase 

 will generally lead to an increase in the demand at all prices, 

 and so will raise prices, and vice versd. 



In the long run there is no law by which the probable price 

 of an article limited in quantity can be ascertained. 



In the long run the price of any article capable of being 

 manufactured depends mainly on the cost of production ; the 



