ESSAY DISCUSSING THE RISING PRICE OF PETROLEUM Define discussing
essay discussing the rising price of petroleum - erde …
But the current supply is in itself partly due to the action of producers in the past; and this action has been determined on as the result of a comparison of the prices which they expect to get for their goods with the expenses to which they will be put in producing them. The range of expenses of which they take account depends on whether they are merely considering the extra expenses of certain extra production with their existing plant, or are considering whether to lay down new plant for the purpose. In the case, for instance, of an order for a single locomotive, which was discussed a little while ago, the question of readjusting the plant to demand would hardly arise: the main question would be whether more work could conveniently be got out of the existing plant. But in view of an order for a large number of locomotives to be delivered gradually over a series of years, some extension of plant "specially" made for the purpose, and therefore truly to be regarded as prime marginal costs would almost certainly be carefully considered.
essay discussing the rising price of petroleum;
This leads to the consideration of some difficulties of a technical character connected with the marginal expenses of production of a commodity that obeys the law of increasing return. The difficulties arise from the temptation to represent supply price as dependent on the amount produced, without allowing for the length of time that is necessarily occupied by each individual business in extending its internal, and still more its external organization; and in consequence they have been most conspicuous in mathematical and semi-mathematical discussions of the theory of value. For when changes of supply price and amount produced are regarded as dependent exclusively on one another without any reference to gradual growth, it appears reasonable to argue that the marginal supply price for each individual producer is the addition to his aggregate expenses of production made by producing his last element; that this marginal price is likely in many cases to be diminished by an increase in his output much more than the demand price in the general market would be by the same cause.