ABSTRACT
In any actual industry conducted under conditions of simple competition, that is to say, conditions such that each seller produces as much as he can at the ruling market price, and does not restrict his output in the hope of causing that price to rise, investment and output must be carried to a point at which the value of the marginal private net product of investment there conforms to the central value. It follows that the value of the marginal social net product of investment in the industry can only diverge from this central value if and in so far as it diverges from the value of the marginal private net product. This chapter deals with conditions of simple competition. Conditions of decreasing supply price from the standpoint of the community are clearly possible in a material as well as in a formal sense.
