3.It may be noticed here, though the fact is of but little practical importance, that a small quantity of a commodity may be insufficient to meet a certain special want; and then there will be a more than proportionate increase of pleasure when the consumer gets enough of it to enable him to attain the desired end.Thus, for instance, anyone would derive less pleasure in proportion from ten pieces of wall paper than from twelve, if the latter would, and the former would not, cover the whole of the walls of his room.Or again a very short concert or a holiday may fail of its purpose of soothing and recreating: and one of double length might be of more than double total utility.This case corresponds to the fact, which we shall have to study in connection with the tendency to diminishing return, that the capital and labour already applied to any piece of land may be so inadequate for the development of its full powers, that some further expenditure on it even with the existing arts of agriculture would give a more than proportionate return; and in the fact that an improvement in the arts of agriculture may resist that tendency, we shall find an analogy to the condition just mentioned in the text as implied in the law of diminishing utility.
4.See I, II, sec.2.
5.See Note II in the Mathematical Appendix.
6.Such a demand schedule may be translated, on a plan now coming into familiar use, into a curve that may be called his demand curve.Let Ox and Oy be drawn the one horizontally, the other vertically.Let an inch measured along Ox represent 1o lbs.of tea, and an inch measured along Oy represent 40d.
tenths of fortieths of an inch.an inch.
take Om1 = 6, and draw m1p1 = 50
Om2 = 7 "" m2p2 = 40
Om3 = 8 "" m3p3 = 33
Om4 = 9 "" m4p4 = 28
Om5 = 10 "" m5p5 = 24
Om6 = 11 "" m6p6 = 21
Om7 = 12 "" m7p7 = 19
Om8 = 13 "" m8p8 = 17
m1 being on Ox and m1p1 being drawn vertically from m1; and so for the others.Then p1 p2...p8 are points on his demand curve for tea; or as we may say demand points.If we could find demand points in the same manner for every possible quantity of tea, we should get the whole continuous curve DD' as shown in the figure.
This account of the demand schedule and curve is provisional;several difficulties connected with it are deferred to chapter v.
7.Thus Mill says that we must " mean by the word demand, the quantity demanded, and remember that this is not a fixed quantity, but in general varies according to the value."(Principles, III, II, sec.4) This account is scientific in substance; but it is not clearly expressed and it has been much misunderstood.Cairnes prefers to represent "demand as the desire for commodities and services, seeking its end by an offer of general purchasing power, and supply as the desire for general purchasing power, seeking its end by an offer of specific commodities or services." He does this in order that he may be able to speak of a ratio, or equality, of demand and supply.But the quantities of two desires on the part of two different persons cannot be compared directly; their measures may be compared, but not they themselves.And in fact Cairnes is himself driven to speak of supply as "limited by the quantity of specific commodities offered for sale, and demand by the quantity of purchasing power offered for their purchase." But sellers have not a fixed quantity of commodities which they offer for sale unconditionally at whatever price they can get: buyers have not a fixed quantity of purchasing power which they are ready to spend on the specific commodities, however much they pay for them.
Account must then be taken in either case of the relation between quantity and price, in order to complete Cairnes' account, and when this is done it is brought back to the lines followed by Mill.He says, indeed, that "Demand, as defined by Mill, is to be understood as measured, not, as my definition would require, by the quantity of purchasing power offered in support of the desire for commodities, but by the quantity of commodities for which such purchasing power is offered." It is true that there is a great difference between the statements, "I will buy twelve eggs," and "I will buy a shilling's Worth of eggs." But there is no substantive difference between the statement, "I will buy twelve eggs at a penny each, but only six at three halfpence each," and the statement, "I will spend a shilling on eggs at a penny each, but if they cost three halfpence each I will spend ninepence on them." But while Cairnes' account when completed becomes substantially the same as Mill's, its present form is even more misleading.(See an article by the present writer on Mill's Theory of Value in the Fortnightly Review for April, 1876)8.We may sometimes find it convenient to speak of this as a raising of his demand schedule.Geometrically it is represented by raising his demand curve, or, what comes to the same thing, moving it to the right, with perhaps some modification of its shape.
9.The demand is represented by the same curve as before, only an inch measured along Ox now represents ten million pounds instead of ten pounds.And a formal definition of the demand curve for a market may be given thus:-The demand curve for any commodity in a market during any given unit of time is the locus of demand points for it.That is to say, it is a curve such that if from any point P on it, a straight line PM be drawn perpendicular to Ox, PM represents the price at which purchasers will be forthcoming for an amount of the commodity represented by OM.
