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

This is the meaning of the claim that, at any given time and place, the price of a product original: "commodity" rises in proportion to an increase in demand and a decrease in supply, and conversely original: vice versâ; or in other words, that the rise in price is directly related to demand and inversely related to supply.

The utility the usefulness or satisfaction a consumer gets from a product of an object—or, what is the same thing, the desire to obtain it—may possibly be unable to raise its price high enough to cover its cost of production. In this case, it is not produced, because manufacturing it would cost more than the product would be worth. For example, the price that caviar A salted dish made from the eggs (original: "roe") of sturgeon, a favorite part of the Russian diet. would fetch in Paris would likely not even equal the cost of producing it there. It is in such low demand there that it would hardly bring the lowest price required to make it available, and consequently, it is not produced; but elsewhere, it is both produced and consumed in great quantities.

When the price of any object is legally fixed below the costs of its production, its manufacturing is stopped because no one is willing to work for a loss. Those who previously earned their living through this branch of production must starve if they cannot find other employment; and those who could have purchased the product at its natural market price are forced to go without it. The establishment of a fixed rate, or price ceiling original: "maximum"; this refers to government-imposed limits on how much can be charged for goods, results in the suppression of a portion of production and—

original note: A pickle made of the roe of sturgeons, a favorite condiment of Russian diet.