PRINCIPLES OF VALUE AND PRICE 437 



does not necessarily mean extravagantly high price. In this example 

 the price most advantageous to the monopolist is about double the 

 expense of production. In actual practice the margin of monopoly 

 profit is apt to be even smaller than this except for goods the demand 

 for which is quite inelastic. 



When a monopolist enjoys exclusive control of the monopolized 

 good, he may fix the price, at the point affording the maximum profit 

 without fear of exciting competition. But few monopolists are so 

 fortunately situated as this implies. Competition, even though not 

 in active operation, is an ever-present possibility with which most 

 monopolists must reckon. Prudence, therefore, usually dictates a 

 more conservative policy in reference to prices in order to protect the 

 monopoly from future competition or from possible regulation by the 

 government. 



B. The Supply Side of Agricultural Prices 



136. THE EFFECT OF OVERSUPPLY ON PRICE 1 

 BY C. WOOD DAVIS 



From the close of the Civil War until near the middle of the ninth 

 decade, the farmer shared in the nation's prosperity. In more recent 

 years, however, this state of thrift has been succeeded by one of 

 unremunerative toil, accompanied by much privation. When, as is 

 now the case over vast areas, wheat sells at from 40 to 50 cents, oats 

 at from 9 to 12 cents, and corn from 10 to 13 cents a bushel, and fat 

 cattle from i| to 3 cents a pound, the farmer can indulge in but few 

 luxuries. 



During a period of 39 years, ending in 1889, population, farms, 

 and the production of the more important staples increased as follows: 



Population 175 per cent 



Number of farms 260 



Cattle 185 



Swine 66 



Bales of cotton 201 



Bushels of corn 257 



Bushels of wheat 389 



Bushels of oats 411 



1 Adapted from "Why the Fanner Is Not Prosperous," Forum, IX (March, 

 1890), 233-41. 



