A Treatise on Political Economy - The Production, Distribution, and Consumption of Wealth

...brought to market. This happens because the supply becomes more active original: "brisker" and sales become slower original: "duller" as people anticipate the future. Dealers are anxious to sell their current stock because they fear competition from the new harvest original: "vintage". Meanwhile, consumers hold off on making new purchases, expecting to get a better price by waiting. Similarly, a large shipment of foreign goods arriving and being sold all at once lowers their price because the supply suddenly exceeds the demand. On the other hand, the expectation of a poor harvest or the loss of many ships at sea will raise prices above the actual cost of production. (d)

(d) Here again, the author's wording is imprecise. It must be understood as referring to the price of each individual unit original: "separate portion" of the product, not the total price of the entire supply. When the price is raised, the demand is reduced; the desire for the product is dampened because it is harder for individuals to afford it. This is true even if the entire supply cost the community the same amount of productive effort—as in the previous example regarding losses during a sea voyage.

Thus, when wine is expensive, the total amount of money spent on its consumption will probably be smaller than when it is cheap. This is true even though the human labor spent on producing that smaller quantity may have been equal to the labor that would have been spent on a larger quantity. This conclusion follows the author’s own principles.

There is only one exception to this rule: the case of essential food items original: "articles of aliment of the first necessity". A small surplus or shortage in the supply of these will cause a massive change in the price of the entire commodity. Why? Because the human appetite and the basic need for food cannot be shrunk or expanded as quickly as the supply changes or as quickly as the difficulty of obtaining it increases. This point was noted by our author above original: "suprà"; Latin for "above", in Book I, chapter 17, section 4. — Translator. original: "T."