of another.

Usually, indeed, we measure the values of things by their #prices#. The
#price is the quantity of money which we give for a thing#; in this case
the proportion is between the quantity of money and the quantity of
goods we get for it, as when we give sixty shillings for ten yards of
carpet. We shall learn later on that money is a kind of commodity, which
has utility and value like other commodities. But there is great
convenience in always thinking and speaking of values in money, because
we can then readily compare the value of one thing with that of any
other. If a pound of potatoes costs one penny, a pound of bread
threepence, and a pound of beef ninepence, we can see at once that a
pound of beef is of the same value as three pounds of bread and nine
pounds of potatoes, and we can judge how much of each to use.

73. #Laws of Supply and Demand.# In the next place, we must try to
understand how the values of things are governed, and made to change
from time to time. The principal laws which govern values are called
#the laws of supply and demand#, and they are very important indeed.
#Supply# means the quantity of any goods which people are willing to
give in exchange at a certain value, and #demand# means similarly the
quantity of goods which people are willing to take in exchange; but,
before a person can judge how much he wishes to buy of a particular kind
of goods, he must know its price, that is, its proportion in exchange
for money. If bread, instead of being threepence per pound, becomes
fourpence, a poor person would perhaps decide to take less bread, and to
buy more potatoes. If beef, instead of being ninepence, should rise to a
shilling, or fourteenpence a pound, some people would refuse to buy it
altogether, and others would buy less than before. The supply of things
varies similarly; if the price of meat rises high, farmers who own
cattle bring them to market, in order to get a good profit by selling
them; if the price falls low, they keep their cattle to sell at another
time.

#The Laws of Supply and Demand# may be thus stated: a rise of price
tends to produce a greater supply and a less demand; a fall of price
tends to produce a less supply and a greater demand. Conversely, an
increase of supply or a decrease of demand tends to lower price, and a
decrease of supply or an increase of demand to raise price.

These laws are so important that I will state them over again, in the
form of a tabl