THE INCIDENCE OF TAXES 109 



of either buyers' or sellers' minds in any real large market. 

 There are always a few holders who would only sell if the price 

 were much higher than the market price, these are the people 

 who expect prices to rise ; there are some who are just willing 

 to sell at the market price, but who will not sell a penny below ; 

 and there are others, weak holders, who expect prices to fall, 

 and these would really, if pushed to extremity, sell below the 

 market price. This condition of things is represented by the 

 supply curve in Fig. 1. 



Similarly, there are a few buyers who, if pushed to extremity, 

 would buy some goods above market price ; some also will just 

 buy at market price ; some will not buy unless the price is below 

 market price. This is represented by the demand curve. 



Now, I contend that when the market price is fixed, those 

 traders who are perfectly indifferent whether they buy or sell at 

 that price reap no benefit by the trade ; but these will be few in 

 number. 



Looking at the demand curve, the ordinate a? A from the axis 

 O Y to A represents the value set on some of the goods by some 

 buyers, but these buyers have got the goods for the sum repre- 

 sented by the ordinate x=0 M ; the difference between these two 

 ordinates x^x is the difference in price between what was 

 given and what might have been given for a certain small quan- 

 tity Ay of goods. Ay (a; A x) is therefore the benefit reaped by 

 buyers from the purchase of the quantity Ay ; and integrating 

 the benefits derived from the sale of each successive quantity, we 

 find the area M D C B A X represents the whole gain to buyers by 

 the purchase of the quantity y of goods. Similarly, it is easy to 

 show that the area M D c b a P represents the gain to sellers by the 

 same transaction ; these areas represent the gain in money, 

 each product Ay ( A x) being the product of a quantity by the 

 gain in money per unit of quantity. 



Thus the whole benefit to the two leading communities is 

 represented by the sum of the two above-named areas, and the 

 partition of the benefit between the two communities is perfectly 

 definite. 



Professor Jevons has used curves to integrate what he terms 

 the utility gained by exchange in a manner analogous to the 

 above ; but utility, as he defines it, admits of no practical 



