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From:
[log in to unmask] (Tiziano Raffaelli)
Date:
Fri Mar 31 17:18:19 2006
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================= HES POSTING ================= 
 
The answer is that Marshall wanted to convey the producers' point of view 
rather than the consumers'. While it is reasonable to say that decisions 
to buy depend on price, decisions to produce take the quantities as given 
and consider the price at which a given quantity can be sold as the true 
variable. The producer knows his costs of production for any given 
quantity and has to guess whether the selling price of that quantity will 
repay his costs of production. 
 
Therefore, while demand is a function of price, supply is not (cf. for 
example Industry and Trade, p. 188, note) (II,i,3). 
 
This approach is clearly present in the Early Economic Writings dealing 
with the theory of value, where the modern use of representing quantities 
on the horizontal axis and prices on the vertical was introduced (in 
contrast to what other economists of the period were doing). Of course, 
for Marshall this is a simplification, since quantity and price are 
mutually related and we cannot properly say that one dependes on the 
other. 
 
Tiziano Raffaelli 
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