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price, and buyers, unable to regulate it, have no 

 alternative but to pay it or go without. This may 

 be called the seller's price 3 the limit to which, can 

 be determined only, by equalizing the ratio the 

 necessities of the parties bear to each other, or 

 that of the quantity in. demand to the quantity 

 of the commodity for sale.* Another case ia 

 the converse of this viz., that in which the mo* 



* Mr. Mill (Principles of Political Economy p. 543) objects to 

 the term ratio, on the double ground of its being unprecise, and 

 inappropriate. It may be so ; for, to speak of a ratio between two vary- 

 ing- magnitudes is mathematically absurd. 1 use the term, because 

 it is current ; and he has not, unfortunately, left us any better 

 to define the operation by which an equilibrium is effected by 

 which the terms of the equation are made equal. In objecting 

 that the quantity in demand is not fixed, but varies according to 

 the value, he says. ''The demand therefore, partly depends 

 on the value. But it was before laid down that the value 

 depends on the demand. From this contradiction how shall we 

 extricate ourselves?" He then lays down the following equation 

 of value. ' Demand and Supply, the quantity demanded and the 

 quantity supplied, will be made equal ;' and defines " the value 

 a commodity will bring in any market" to be, ' no other than ihe value 

 which in that market gives a demand just sufficient to carry off the 

 existing or expected supply." Now this is quite intelligible to 

 any person with a tolerable knowledge of the subject, who reads 

 Mr. Mill's lucid explanation : but his definition does not leave it clear 

 whether the value regulates, or is regulated, by the demand, or neither 

 or both ; and as he uses the word value to define both the operation and 

 the result of it, we are not left a very great choice of terms. Value is 

 no doubt, as it were, a compensating balance between demand and sup- 

 ply ; but how to define the operation by which it adjusts itself, or is 

 adjusted, and at the same time express that the value will be highest 

 when the demand is g'reatest and the supply least, and vice versa, 

 is a difficulty, the resort to mathematical phraseology has not 



irinountedi 



