PRINCIPLES OF VALUE AND PRICE 423 



An increase in the amount of a thing that a person has will, other 

 things being equal (i.e., the purchasing power of money, and the 

 amount of money at his command being equal), diminish the price 

 which he will pay for a little more of it; or in other words diminishes 

 his marginal demand price for it. 



His demand becomes efficient, only when the price which he is will- 

 ing to offer reaches that at which others are willing to seU. 



This last sentence reminds us that we have as yet taken no account 

 of changes in the marginal utility of money, or general purchasing 

 power. At one and the same time, a person's material resources being 

 unchanged, the marginal utility of money to him is a fixed quantity, 

 so that the prices he is just willing to pay for two commodities are to 

 one another in the same ratio as the utility of those two commodities. 



A greater utility will be required to induce him to buy a thing if 

 he is poor than if he is rich. We have seen how the clerk with 100 

 pounds a year will walk to business in a heavier rain than the clerk 

 with 300 pounds a year. But although the utility, or the benefit, that 

 is measured in the poorer man's mind by sixpence is greater than that 

 measured by it in the richer man's mind; yet if the richer man rides 

 a hundred times in the year and the poorer man twenty times, then 

 the utility of the hundredth ride which the richer man is only just 

 induced to take is measured to him by sixpence. For each of them 

 the marginal utility is measured by sixpence; but this marginal 

 utility is greater in the case of the poorer man than in that of the 

 richer. 



In other words, the richer a man becomes the less is the marginal 

 utility of money to him; every increase in his resources increases the 

 price which he is willing to pay for any given benefit. And in the 

 same way every diminution of his resources increases the marginal 

 utility of money to him, and diminishes the price that he is willing to 

 pay for any benefit. 



When, then, we say that a person's demand for anything increases, 

 we mean that he will buy more of it than he would before at the same 

 price, and that he will buy as much of it as before at a higher price. 

 To complete our knowledge of his demand for it, we should have to 

 ascertain how much of it he would be willing to purchase at each of 

 the prices at which it is likely to be offered; and the circumstance of 

 his demand for, say, tea can be best expressed by a list of the prices 

 which he is willing to pay; that is, by his several demand prices for 

 different amounts of it. (This list may be called his demand schedule.) 



