of a community isolated from the
outside world. The price which he could exact would be the full measure
of all the possessions of his neighbors up to the point at least where
they would commit suicide rather than pay. True, in such a case as this,
"economic strength" would probably be broken down by the intrusion of
physical violence. But in so far as it held good the price of food would
be based upon it.

Prices such as are indicated here were dismissed by the earlier
economist as mere economic curiosities. John Stuart Mill has something
to say about the price of a "music box in the wilds of Lake Superior,"
which, as he perceived, would not be connected with the expense of
producing it, but might be vastly more or perhaps decidedly less. But
Mill might have said the same thing about the price of a music box,
provided it was properly patented, anywhere at all. For the music box
and Shakespere's skull and the corner in wheat are all merely different
kinds of examples of the things called a monopoly sale.

Now let us change the example a little further. Suppose that the
monopolist has for sale not simply a fixed and definite quantity of a
certain article, but something which he can produce in larger quantities
as desired. At what price will he now sell? If he offers the article at
a very high price only a few people will take it: if he lowers the price
there will be more and more purchasers. His interest seems divided. He
will want to put the price as high as possible so that the profit on
each single article (over what it costs him to produce it) will be as
great as possible. But he will also want to make as many sales as he
possibly can, which will induce him to set the price low enough to bring
in new buyers. But, of course, if he puts the price so low that it only
covers the cost of making the goods his profit is all gone and the mere
multiplicity of sales is no good to him. He must try therefore to find
a point of maximum profit where, having in view both the number of sales
and the profit over cost on each sale the net profit is at its greatest.
This gives us the fundamental law of monopoly price. It is to be noted
that under modern conditions of production the cost of manufacture per
article decreases to a great extent in proportion as a larger and larger
number is produced and thus the widening of the sale lowers the
proportionate cost. In any particular case, therefore, it may turn out
that the price that suit