but what demand there is, often has considerable elasticity.Part of the demand for the more expensive kinds of food is really a demand for the means of obtaining social distinction, and is almost insatiable.(4*)4.The case of necessaries is exceptional.When the price of wheat is very high, and again when it is very low, the demand has very little elasticity: at all events if we assume that wheat, even when scarce, is the cheapest food for man; and that, even when most plentiful, it is not consumed in any other way.We know that a fall in the price of the quartern loaf from 6d.to 4d.has scarcely any effect in increasing the consumption of bread.With regard to the other end of the scale it is more difficult to speak with certainty, because there has been no approach to a scarcity in England since the repeal of the corn laws.But, availing ourselves of the experience of a less happy time, we may suppose that deficits in the supply of 1, 2, 3, 4, or 5 tenths would cause a rise in price of 3, 8, 16, 28, or 45 tenths respectively.(5*) Much greater variations in prices indeed than this have not been uncommon.Thus wheat sold in London for ten shillings a bushel in 1335, but in the following year it sold for ten pence.(6*)There may be even more violent changes than this in the price of a thing which is not necessary, if it is perishable and the demand for it is inelastic: thus fish may be very dear one day, and sold for manure two or three days later.
Water is one of the few things the consumption of which we are able to observe at all prices, from the very highest down to nothing at all.At moderate prices the demand for it is very elastic.But the uses to which it can be put are capable of being completely filled: and as its price sinks towards zero the demand for it loses its elasticity.Nearly the same may be said of salt.
Its price in England is so low that the demand for it as an article of food is very inelastic: but in India the price is comparatively high and the demand is comparatively elastic.
The price of house-room, on the other hand, has never fallen very low except when a locality is being deserted by its inhabitants.Where the condition of society is healthy, and there is no check to general prosperity, there seems always to be an elastic demand for house-room, on account both of the real conveniences and the social distinction which it affords.The desire for those kinds of clothing which are not used for the purpose of display, is satiable: when their price is low the demand for them has scarcely any elasticity.
The demand for things of a higher quality depends much on sensibility.some people care little for a refined flavour in their wine provided they can get plenty of it: others crave a high quality, but are easily satiated.In the ordinary working class districts the inferior and the better joints are sold at nearly the same price: but some well-paid artisans in the north of England have developed a liking for the best meat, and will pay for it nearly as high a price as can be got in the west end of London, where the price is kept artificially high by the necessity of sending the inferior joints away for sale elsewhere.
U se also gives rise to acquired distastes as well as to acquired tastes.Illustrations which make a book attractive to many readers, will repel those whose familiarity with better work has rendered them fastidious.A person of high musical sensibility in a large town will avoid bad concerts: though he might go to.them gladly if he lived in a small town, where no good concerts are to be heard, because there are not enough persons willing to pay the high price required to cover their expenses.The effective demand for first-rate music is elastic only in large towns; for second-rate music it is elastic both in large and small towns.
Generally speaking those things have the most elastic demand, which are capable of being applied to many different uses.Water for instance is needed first as food, then for cooking, then for washing of various kinds and so on.When there is no special drought, but water is sold by the pailful, the price may be low enough to enable even the poorer classes to drink as much of it as they are inclined, while for cooking they sometimes use the same water twice over, and they apply it very scantily in washing.The middle classes will perhaps not use any of it twice for cooking; but they will make a pail of water go a good deal further for washing purposes than if they had an unlimited supply at command.When water is supplied by pipes, and charged at a very low rate by meter, many people use as much of it even for washing as they feel at all inclined to do; and when the water is supplied not by meter but at a fixed annual charge, and is laid on in every place where it is wanted, the use of it for every purpose is carried to the full satiety limit.(7*)On the other hand, demand is, generally speaking, very inelastic, firstly, for absolute necessaries (as distinguished from conventional necessaries and necessaries for efficiency);and secondly, for some of those luxuries of the rich which do not absorb much of their income.
5.So far we have taken no account of the difficulties of getting exact lists of demand prices, and interpreting them correctly.The first which we have to consider arises from the element of time, the source of many of the greatest difficulties in economics.
Thus while a list of demand prices represents the changes in the price at which a commodity can be sold consequent on changes in the amount offered for sale, other things being, yet other things seldom are equal in fact over equal; periods of time sufficiently long for the collection of full and trustworthy statistics.There are always occurring disturbing causes whose effects are commingled with, and cannot easily be separated from, the effects of that particular cause which we desire to isolate.
