one subgroup into other subgroups of
that series rather than into other general groups.

An improvement that should reduce the cost of converting leather into
shoes would, by the sale of the shoes, call for more leather, more
cattle, more appliances, more tanning, and larger buildings for shoe
factories, furnished with more shoemaking machinery and greater motive
power, even though the particular machines which were improved by the
invention had become so much more efficient that no more of them were
needed. This depends on the extent to which a certain reduction of
cost of a product enlarges the market for it.

_Principles Governing the Enlargement of the Effectual Demand for One
Commodity._--In determining how much a reduction of the price of a
single article will at once enlarge the market for it, there are two
things to be considered, namely, the elasticity of the want itself to
which the article caters, and the extent to which an article catering
to a particular want may be substituted for other articles designed to
satisfy the same one. The desire for jewels and other articles of
personal adornment is very expansive, and a fall in the price of any
one article of this kind causes a relatively large increase in the
consumption of it. Since the want to which a costly ornament caters is
thus elastic, the cheapening of all articles that cater to this want
would enlarge the consumption of all of them. The cheapening of a
particular one of these articles, if there were in the market many
others of the same general kind, would cause that one to be
extensively used in preference to the others. By an enlargement of the
total amount of decorative articles used and by a relative favoring of
a particular one of them at the cost of others, the sale of that one
would be doubly increased. Cheaper diamonds might mean an increased
use of them without any large reduction in the use of other gems; but
if many other gems happened to be available for the purposes subserved
by the diamonds the use of these others would be curtailed and that of
diamonds would be disproportionately increased.

_The Value of Goods as affected by the Existence of Castes._--One of
the reasons why the market for jewels is thus elastic is the fact that
they serve as badges of caste, as only something of large cost can do.
If, therefore, all gems were to become much cheaper, two things would
happen: (1) relatively poor people would buy some of them--partly in