ble. The laws which govern the market for
finished goods of declining cost have first to be studied.

_The Effect of Substituting one Consumers' Good for Others._--Reducing
the cost of everything would cause an absolute increase in the
consumption of everything; but reducing the cost of a single thing
always causes, as we have seen, a _relative_ increase in the
consumption of that one product. While the demand for other articles
may not grow absolutely less, it becomes relatively less because of
the comparative cheapness of the one product.[2]

[2] It is worth noticing (1) that uniformly reducing the
cost of everything would cause _comparative_ changes in
consumption. Anything which should take away a quarter of the
cost of every article in the entire list of social products
would increase the consumption of some articles more than
it would increase that of others. There is an extremely
theoretical case in which there might even be a lessening
of the effectual demand for a few things because a uniform
reduction of twenty-five per cent would cause other things
to be extensively substituted for them. This thinkable
possibility is not practically important.

A detailed study would show (2) that a reduction in the cost
of any single article in the entire list of social products
causes an increase in the consumption of commodities in
general. As an isolated man who has had to work hard for mere
food and content himself with a few comforts and no luxuries
will indulge in luxuries when food production becomes much
easier, so society as an organic whole will increase its
indulgences all along the line whenever the work of getting
any one thing is reduced and some working time is thus
liberated.

A substitution of one article for another in the lists of goods used
by the public is a universal phenomenon attending an improvement which
affects the production of one article only. When the cost of _A'''_
causes it to stand just outside of the purchase limit of a large class
of persons, a moderate reduction in the cost of it will make it a more
desirable subject of purchase than the articles which have stood just
within that limit, and it will be bought instead of one or more of
these things. The securing of new customers for a finished product by
means of a fall in the price of it is largely brought about by such
substitutions. When the new art