THE PRICE OF WHEAT 137 
provably approximates most closely to the nature of a 
world market. 
Then, again, markets vary with regard to the period 
of time which is allowed to the forces of demand and 
supply to bring themselves into equilibrium with each 
other as well as with regard to the area over which 
they extend. This element of time is really of more 
importance than that of space; for the nature of the 
equilibrium itself, and that of the causes by which it 
is determined, depend on the length of the period over 
which the market is taken to extend. Three groups are 
distinguishable here also, according to the length of this 
period. If the period is short the supply is limited to 
the stores which happen to be at hand, as in the case of 
perishable goods. If the period is longer, then supply 
will be influenced, more or less, by the cost of producing 
the commodity, as in the case of raw produce where 
machinery is not complex, for example, wheat in India. 
Lastly, if the period is very long the cost of production 
itself will be influenced by the cost of producing 
the labour and material required for producing the 
commodity, as in the case of goods where much machinery 
is used, for example, the precious metals. 
These three classes merge into one another by imper- 
ceptible degrees, and we may class wheat as on the 
border between the second and third classes. 
Having now fully determined the nature of the wheat 
market we are ready to study the factors which operate 
through this market to determine the price of wheat. 
3. Supply and Demand. 
The market price of wheat is the result of the 
tendency of supply and demand to reach a point of 
equilibrium. But modern factors operating to produce 
this equilibrium are so many and complex that the great 
underlying principle of the equilibrium of supply and 
EQ 
