ABSTRACT
An essential object of every capitalist entrepreneur is to anticipate rightly the demand for the products which he has to sell—that is, the price at which he will be able to sell a given quantity, or the quantity he will be able to sell at a given price. In industries in which the adjustment of supply to demand takes a long time, because the process of production is protracted, and especially where the cost of errors in anticipating demand is very high, there is a strong inducement for entrepreneurs to endeavour to escape from this unsatisfactory position. Consequently agreements to observe fixed or minimum prices are often extended to include an allocation of definite output quotas to the various entrepreneurs. The trade as a whole fixes a level of total output, and quotas adding up to this total arc assigned to the individual firms.
