There must be then some individual who will buy more at the price PM, than he will at any higher price; and we are to regard the OMth lb.as sold to this individual.Suppose for instance that PMrepresents 4s., and that OM represents a million lbs.The purchaser described in the text is just willing to buy his fifth lb.of tea at the price 4s., and the OMth or millionth lb.may be said to be sold to him.If AH and therefore RM represent 2s., the consumers' surplus derived from the OMth lb.is the excess of PMor 4s.which the purchaser of that lb.would have been willing to pay for it over RM the 2s.which he actually does pay for it.Let us suppose that a very thin vertical parallelogram is drawn of which the height is PM and of which the base is the distance along Ox that measures the single unit or lb.of tea.It will be convenient henceforward to regard price as measured not by a mathematical straight line without thickness, as PM; but by a very thin parallelogram, or as it may be called a thick straight line, of which the breadth is in every case equal to the distance along Ox which measures a unit or lb.of tea.Thus we should say that the total satisfaction derived from the OMth lb.of tea is represented (or, on the assumption made in the last paragraph of the text is measured) by the thick straight line MP; that the price paid for this lb.is represented by the thick straight line MR and the consumers' surplus derived from this lb.by the thick straight line RP.Now let us suppose that such thin parallelograms, or thick straight lines, are drawn from all positions of M between O and H, one for each lb.of tea.The thick straight lines thus drawn, as MP is, from Ox up to the demand curve will each represent the aggregate of the satisfaction derived from a lb.of tea; and taken together thus occupy and exactly fill up the whole area DOHA.Therefore we may say that the area DOHA represents the aggregate of the satisfaction derived from the consumption of tea.Again, each of the straight lines drawn, as MR is, from Ox upwards as far as ACrepresents the price that actually is paid for a lb.of tea.
These straight lines together make up the area COHA; and therefore this area represents the total price paid for tea.
Finally each of the straight lines drawn as RP is from AC upwards as far as the demand curve, represents the consumers' surplus derived from the corresponding lb.of tea.These straight lines together make up the area DCA; and therefore this area represents the total consumers' surplus that is derived from tea when the price is AH.But it must be repeated that this geometrical measurement is only an aggregate of the measures of benefits which are not all measured on the same scale except on the assumption just made in the text.Unless that assumption is made the area only represents an aggregate of satisfactions, the several amounts of which are not exactly measured.On that assumption only, its area measures the volume of the total net satisfaction derived from the tea by its various purchasers.
5.Harris On Coins 1757, says "Things in general are valued, not according to their real uses in supplying the necessities of men;but rather in proportion to the land, labour and skill that are requisite to produce them.It is according to this proportion nearly, that things or commodities are exchanged one for another;and it is by the said scale, that the intrinsic values of most things are chiefly estimated.Water is of great use, and yet ordinarily of little or no value; because in most places, water flows spontaneously in such great plenty, as not to be withheld within the limits of private property; but all may have enough, without other expense than that of bringing or conducting it, when the case so requires.On the other hand, diamonds being very scarce, have upon that account a great value, though they are but little use."6.There might conceivably be persons of high sensibility who would suffer specially from the want of either salt or tea: or who were generally sensitive, and would suffer more from the loss of a certain part of their income than others in the same station of life.But it would be assumed that such differences between individuals might be neglected, since we were considering in either case the average of large numbers of people; though of course it might be necessary to consider whether there were some special reason for believing, say, that those who laid most store by tea were a specially sensitive class of people.If it could, then a separaTe allowance for this would have to be made before applying the results of economic analysis to practical problems of ethics or politics.
7.Some ambiguous phrases in earlier editions appear to have suggested to some readers the opposite opinion.But the task of adding together the total utilities of all commodities, so as to obtain the aggregate of the total utility of all wealth, is beyond the range of any but the most elaborate mathematical formulae.An attempt to treat it by them some years ago convinced the present writer that even if the task be theoretically feasible, the result would be encumbered by so many hypotheses as to be practically useless.
