ECONOMIC GOODS AND THEIR VALUATION 37 



tional variations in the potato crop. The prices of farm prod- 

 ucts are influenced by the fact that most of the supply of a 

 given product becomes available during a small portion of the 

 year, and this supply must last until the next year's supply is 

 ready for use. A factory manufacturing steel rails, copper 

 wire, or cotton cloth may put out a continuous flow of goods, 

 but with most farm products the output is intermittent. 

 The tendency is for the price to be low when the greatest 

 supply becomes available, and high in the period prior to 

 the arrival of the new supply. This is due to the fact that a 

 part of the supply must be stored, which involves the expense 

 for storage room, interest on the money invested in the prod- 

 uct, and a loss due to shrinkage. 



The variation in demand due to changes in prices is very dif- 

 ferent with different classes of goods. For some goods the de- 

 mand is very stable ; for others it is very elastic. Where the 

 demand is stable it takes a big change in prices to force people 

 to make any changes in the amounts consumed. On the other 

 hand, where the demand is elastic the quantity consumed tends 

 to fall off rapidly with increased prices or decreased supplies 

 of money to spend. By elasticity of demand is meant its 

 sensitiveness to changes in the price as a result of changes in 

 the quality or the quantity of the product or in the purchasing 

 power of the commodity. A stable demand is one which is 

 not easily influenced by changes in these conditions. The 

 demand for bread and for potatoes is fairly regular throughout 

 the year, and a considerable change in price is required to make 

 any important change in the demand, hence, the demand for 

 these articles may be said to be inelastic, or stable. On the 

 other hand, the demand for eggs varies greatly during the year 

 in response to changes in the price and in the quality of the 

 supply, hence the demand is said to be elastic. The more 

 readily a substitute can be found the more elastic will be the 

 demand, and the less will prices fluctuate as a result of changes 

 in the supply. Where substitutions are easily made the quality 

 of the product affects greatly the quantity demanded. If the 

 first order of cabbages made by the housewife turns out to be 



