378 AGRICULTURAL ECONOMICS 



people will eat. So long as prices are the same the customer is 

 not likely to change, but every time the consumers' price changes, 

 consumption customs are shaken ; and the more violent the 

 change the more likely the custom is to be upset. It is not only 

 the industry, then, but the market which may be damaged by 

 impassioned actions. 



Just as it is by comparing profits that the farmer makes choice 

 of types of farming, so it is by comparing prices in the market 

 that the consumer makes choice. If it is done in the right way, 

 the price of one commodity may be raised as rapidly as that of 

 its substitute. So long as relative prices are the same, the 

 choices may be expected to be the same. If, however, much 

 publicity of an antagonistic sort accompanies the change in the 

 price of one article while the change in another is accompanied 

 by shrewd advertising which wins the sympathy of the con- 

 sumer, there may be a falling off in the demand of the former and 

 an increase in the consumption of the latter. 



Price commissions should make a careful study of the amount 

 and character of the product demanded at various prices and the 

 character and amount of the product which can be secured at 

 these prices, and adjust the price on the basis of maintaining an 

 equilibrium between demand and supply through a long period. 

 In doing this, account will need to be taken of the substitutes 

 to which the consumer may turn, as well as profits in other types 

 of farming to which the milk producer may later change if the 

 price is fixed too low compared with other prices. 



The forces and conditions which determine supply and demand 

 are too little understood. The law of supply and demand as a 

 price regulator does not always give satisfactory results. It 

 might be made to work much more equitably under the guid- 

 ance of a commission than when influenced by the unequal 

 bargaining power of great distributing corporations on the one 

 hand and of the isolated producers on the other. 



A properly organized permanent price commission might 

 inaugurate an educational program which would improve the 

 mutual attitude of mind of the producer and consumer toward 

 each other, which would make each more considerate of the 



