ncrease in
any close correspondence with the growth of the output, but will
represent the fluctuating resultant of the several economies of
production at the several points.

[Illustration: CURVE OF PROFIT IN TRUST.]

In the figures A and B the perpendicular line _ai_ represents a number
of increments of production. The expense of producing a supply of 100
will be measured by the line _bb'_, that of producing 200 by _cc'_,
and so on. But never in actual industry will the lines of growing
expense be regular in their relation to the increase of production, as
would be the case in the figure A; they will always be irregular, as
in the figure B. The curve of expense _ai'_ in the figure B will be
determined by the resultant of the various forces which make for
increasing and diminishing returns for each new increment of the
requisites of production required to produce the new portion of
output. When the increased scale of production makes some new
application of machinery economically possible, or where recourse must
be had to some decidedly inferior land for the raw material, a large
sudden irregularity may show itself in the curve of expense.

When we turn from expenses of production to the aggregate takings from
the sale of the several quantities of supply, we shall find a similar
irregularity of increase. Elasticity in demand, as tested by the
stimulus given to consumption by a fall of price, differs not merely
in different commodities, but at different points in a falling scale
of prices. A number of equal decrements in price, according as they
stimulate the satisfaction of weaker wants of earlier consumers, or
strike into new classes of consumers, or supply new kinds of wants,
will have widely different effects in increasing the aggregate
takings.

We have then two widely fluctuating and highly irregular gradations of
money terms, representing expenses of production and the aggregate
price of the various quantities of supply, each determined by a wholly
different class of considerations. But the interest of a Trust, as we
see, lies in fixing supply at the highest net profits. Now the net
profits of producing and selling any specified quantity of supply are
ascertained by deducting the expenses of production from the aggregate
takings. The relation between the growth of expenses of production and
of aggregate takings will yield a different net amount of profit at
each increment of supply. The diagram opposite w