PRINCIPLES OF VALUE AND PRICE 421 



lates, and to which it always tends to return; the center value, 

 toward which, as Adam Smith expresses it, the market value of a 

 thing is constantly gravitating; and any deviation from which is but 

 a temporary irregularity, which, the moment it exists, sets forces in 

 motion tending to correct it. On an average of years sufficient to 

 enable the oscillations on one side of the central line to be compen- 

 sated by those on the other, the market value agrees with the natural 

 value; but it very seldom coincides exactly with it at any particular 

 time. The sea everywhere tends to a level, but it never is at an 

 exact level; its surface is always ruffled by waves, and often agitated 

 by storms. It is enough that no point, at least in the open sea, is 

 permanently higher than another. Each place is alternately elevated 

 and depressed; but the ocean preserves its level. 



Every commodity of which the supply can be indefinitely increased 

 by labour and capital, exchanges for other things proportionally to the 

 cost necessary for producing and bringing to market the most costly 

 portion of the supply required. The natural value is synonymous 

 with the cost value, and the cost value of a thing means the cost value 

 of the most costly portion of it. 



133. UTILITY AND THE DEMAND SCHEDULE 1 

 BY ALFRED MARSHALL 



"Utility" and "want" are taken as correlative terms. The 

 utility of a thing to a person at a time is measured by the extent to 

 which it satisfies his wants. Each several want is limited, and with 

 every increase in the amount of a thing which a man has the eagerness 

 of his desire to obtain more of it diminishes; until it yields place to 

 the desire for some other thing, of which perhaps he hardly thought 

 so long as his more urgent wants were still unsatisfied. There is an 

 endless variety of wants, but there is a limit to each separate want. 

 This familiar and fundamental tendency of human nature may be 

 stated in the law of satiable wants or of diminishing utility thus: 



The total utility of a thing to anyone (that is, the total pleasure 

 or other benefit it yields him) increases with every increase in his 

 stock of it, but not as fast as his stock increases. If his stock of it 

 increases at a uniform rate the benefit derived from it increases at a 

 diminishing rate. In other words, the additional benefit which a 



\ Adapted from Principles of Economics, 1, 167-83. Copyright by Macmillan 

 & Co., Ltd., London. Used by permission of the publishers. 



