ed by any watch
whatever; and the same thing is true of other services. Social in a
very concrete and literal sense is the operation of fixing prices.
Only the simplest and cheapest things that are sold in the market at
all bring just what they are worth to the buyers, and all articles of
higher grade offer to all who buy them a surplus of service not offset
by what is paid for them. If we rule out the cheapest and poorest
grades of articles, we find all others affording a "consumers'
surplus."[2]

[2] It will be seen that to a man who buys the seventy-five
dollar coat that article in its entirety is the final one of
its kind which he will buy. He does not want a second coat
exactly like the first. The same thing is true of the man who
buys the five hundred dollar watch, since he does not think
of buying more than one. In each case the first unit of the
article bought is the last one, and it contains utilities
which are worth more than they cost. It contains one utility
only which is marginal in the true sense of affording no
surplus of gain above cost. This utility stands on the
boundary line where consumers' surpluses stop.

CHAPTER VII

NORMAL VALUE

_Natural Supply._--We have attained a law of market value, which
determines the price at which a given amount of any commodity will
sell, and have taken a quick glance at the influence which fixes the
amount that is offered and thus furnishes a natural standard to which
the market value tends to conform. At any one moment the amount which
is supplied is an exact quantity, and if it all has to be sold, it
will bring a price which is fixed by the final utility of that amount
of the commodity. If the quantity offered for sale should become
greater or less, the final utility and the price would change. Final
utility controls the immediate selling price, and if that is above the
cost of production, a margin of gain is afforded which appeals to
producers, sets competition working, and brings the quantity made up
to the full amount which can be sold at cost. The amount of the supply
itself is therefore not a matter of chance or caprice. It is natural
that a certain quantity of each article should be supplied, and that
the price should hover about the level which the final utility of that
quantity of the good fixes. "Natural" or "normal" price is, in this
view, the market price of a natural quantity.

_Cost as a Standar