ABSTRACT
Suppose, however, that the human population began to multiply more rapidly than the cattle population, that the taste for meat grew, that meat began to be stored in refrigerators and that, most important of all perhaps, the meat could be exported to distant markets. Domestic meat would become scarce and, therefore, a market for it would come into being. It would then cease to be a spillover, an unintended by-product in the process of obtaining hides for leather. It would take its place as a good in its own right, a joint product with leather. Whatever the separate demands for meat and leather are like, the long-run competitive equilibrium output is optimal, as the cattle population is expanded to the point at which the sum of the market prices are equal to the marginal cost of cattle production. The external effect has been internalized into the pricing system.2
