COURNOT arrives by mathematical reasoning at the conclusion that the effect of an ad valorem tax of so much per cent will be the increase of the expenses of production (including transmission into the consumer's hands) by a larger percentage. Let n be that fraction of the value which constitutes the tax. Then the effect is as if the expenses of production had been increased in the ratio 1 – n :1. Whence it follows that, other things being equal, a tax will be heavier as the expense of production is greater, that is "as in the price of the commodity a smaller part represents the profit" of the seller. The theorem is true both in a regime of monopoly and of competition.