People ordinarily think of the demand for an ar ticle as being fixed and capable of no variation at a given time. They speak of the demand for wheat as being, say, 100 million bushels because that was the amount consumed in the preceding year, and they think of that demand as something which must be somehow satisfied. It does not occur to them that wheat is a foodstuff for which many other foodstuffs will be substituted by many consumers as the price,of wheat is advanced. The rise in the price of' gasolene which followed the outbreak of the Euro pean war was in the first instance the result of an in crease in the demand for it. But at the same time this rise of price caused a lessened demand for gasolene on the part of many consumers. With gasolene at 25 and 30 cents a gallon there is less joy riding in automobiles than there was when it sold at 15 cents.
7. Monopoly and a producer possesses a monopoly and is manufacturing an article for which there is no rival or substitute, the study cif demand becomes exceedingly important. His costs may amount to only- 50 cents, so that he might sell at $1 and realize a handsome profit. Yet he may discover that if he asks $5 for his article his sales will be almost as great as when he asks only $1, the demand being comparatively definite and in elastic. On the other hand, exp_..rience may teach him that the lower price may yield a larger profit, since it may lead to very large sales and such a pop ularization of his article as to relieve him of great advertising expense.
Arany articles the demand for which is inelastic, such as matches, soaps, kerosene' oils and nails, are manufactured in most countries by concerns which possess a virtual monopoly thru the power of the vast capital they possess, ' for it enables them to produce and distribute their goods at lower cost than must be paid by the small producer.
8. Increase of population and the food Aggregate demand is that of an entire popula tion. The relation between population and the food supply was discussed in a pamphlet issued in 1798 by a young English clergyman named Thomas Mal thus. According to the Malthusian doctrine, popula tion tends to increase faster than the food supply, and in support of his position -Malthus gave many histor ical instances which showed that the population tended to increase in a geometric progression, at a rate in dicated by the fig-ures, while food supply increased in an arithmetical progression, indicated by the series of numbers, While today the gloomy presentiments of this doctrine are taken less seriously than formerly, there is nevertheless a truth in it that is worth considering.
The advances in machinery, in the means of pro duction and in the transportation facilities during the nineteenth century, widened the area of cul tivation and increased the supply of products. At the same time, checks on population have been at work, which in a surprising way have held back the growth of numbers. A more complete economic or ganization has laid an increasing number of exac tions on the individual, with the seeming result that the diminishing .birth rate seems to keep pace with the decline in resources and the growing cost of pro ducing crops.
The population of the United States is now over 100,000,000 and is increasing at the rate of over 000 per annum. From the point of view of consump tion and _the supplying of wants, this means a great and growing demand for foodstuffs, higher land val ues, smaller exports of food products, and larger im ports of materials for manufacturing. Progressing at this rate the growth of population in the United States will necessitate the taking up of the waste places and the introduction of an era of intensive cul tivation. Conservation of natural resources also must reach the stage of an economic necessity, and interest in that subject will no longer be deemed a fad as is often the case at present.
9. illalthusian principle exempli fied.—The Mal thusian law of population finds most pitiful exempli fication among the very poor in all countries. It is well known that the birth rate among the poor is very much higher than among the rich and well-to-do. Also among the poor and ignorant the mortality rate for young children is greater because of insufficient food, poor housing and the lack of cleanliness. Nevertheless in most civilized countries the popula tion is increasing in the lower levels of society more rapidly than in the higher.
Charles W. Eliot, former president of Harvard -University, greatly deplores the apparent aversion of Harvard graduates to large families, the records hav ing shown that the family of the average graduate since 1850 contains less than two children.
It may be wise to encourage a higher birth rate among the educated and well-to-do, but any such en couragement extended to the poor is certainly un wise. It is rather the duty of society thru its- preach ers, teachers and physicians to try to make the ig norant get some conception of the responsibilities of parenthood, so that they will not feel, as many now do, that they are serving both God and their country when they bring a child into the world whether they can support it or not.