28 



Irving Fisher — Mathematical investigatio7is 



present memoir, however, attention is confined to those features of 

 production which are strictly analogous to consumption. (See Ap- 

 pendix II, § 8.) 



§ 6. 

 ONE COMMODITY— MANY CONSUMERS. 



Let fig. 4 represent the utility cisterns for all individuals I, II, 

 III, lY, ... N, in the market and let utility be measured in money 



^ 'j 



'■iijiiii>i>iii>>>i»tMii„A/j/)///j////i/>J>i>i. 



^—2 



~ — 3 



— « 



as before, the marginal utility of money being considered constant 

 (say 1 util.). 



The water in the connecting tubes (represented by oblique shad- 

 ing) does not stand for commodit3^ 



The water will seek its own level. This is exactly what happens 

 in the economic world and may be stated in the theorem : A give^i 

 amount of cominodity to be consumed by a marhet during a given 

 period will be so distributed among the individuals that the marginal 

 utilities measured in money loill be equal. Furthermore the margi- 

 nal utility thus determined will be the 'price. 



This follows, for there can be but one price, and each individual 

 will make his marginal utility equal to it, as shown in § 4. 



If the stopper,* S, be pressed, more liquid (commodity) flows into 

 the cisterns, there is an inevitable change in level and the price de- 

 creases. When it cheapens to 2, II begins to indulge. It is for the 

 first time "within his reach." 



It is to be noted that from the standpoint of a single individual 

 the existence of the general price level is an unalterable fact and the 

 amount which he consumes is accommodated to it, just as the gen- 

 eral water level in several hundred cisterns may be said to determine 



* A rubber compression ball would be used in practice. Throughout the de- 

 scriptions, the mechanisms are those simplest to delineate and in many cases 

 not those which might be actually employed. 



