64 Economic Cycles: Their Law and Cause 



f erring to Figure 15, this statement means that if at 

 any point in the demand curve DD', say the point P, 

 a straight line is drawn tangent to the curve, then the 

 trigonometric tangent of the angle which the line makes 

 with the positive direction of the axis of x, is negative. 

 In Professor Marshall's words: "The one universal 

 rule to which the demand curve conforms is that it is 

 inclined negatively throughout the whole of its length." 1 

 As we proceed we shall find that the law of demand for 

 some commodities does indeed conform to the type of 

 curve which has just been described, but it will be a part 

 of the work of the next chapter to show that the doc- 

 trine of the uniformity of the demand function is an 

 idol of the static state — of the method of cceteris 

 paribus — which has stood in the way of the successful 

 treatment of concrete dynamic problems. 



Assuming that the law of demand for a given com- 

 modity is represented by the descending curve DD' in 

 Figure 15, the elasticity of demand for the commodity 



when OM units are bought is measured by the ratio 



MM' QP „. . , ., ,, 



,,,, v.,..' I hat is to say, in general terms, it the price 



of the commodity undergoes a small change, the amount 

 of the commodity that is demanded likewise undergoes 

 a small change, and the degree of the elasticity of de- 

 mand for the commodity, in the given state of the mar- 

 ket, is measured by the ratio of the relative change in 



1 Marshall: Principles of Economics, 4th edit., pp. 174, 174 note 2. 

 In the subsequent reasoning we shall call this type of demand 

 curve the negative type. 



