further stimulated. In other words, these forces must persist until
the entire excess of demand over supply is eliminated. If we start by
supposing supply to exceed demand, the converse chain of sequences
will operate. Now these very simple steps of reasoning illuminate the
nature of the normal equilibrium of demand and supply. They reveal
that the equilibrium is established and maintained by the agency of
_changes in price_, and they enable us to lay it down as perhaps the
most important thing that can be said about the price of anything that
it will tend to be such as will equate demand and supply. But that is
not all that they reveal. They reveal also the extreme dependence of
both demand and supply upon price.

Now this is a fact which it is most important to realize vividly. It
is apt to be obscured by customary modes of speech. In ordinary times
the prices of most commodities and services do not change by very
much, unless indeed over a long period of years; the amounts demanded
and supplied may therefore seem to maintain a fairly constant level;
and we may be tempted to speak of Great Britain producing so many
million tons of coal, or America consuming so many millions of
motor-cars per annum, almost as though these quantities were
independent of price considerations. But we should never forget that
there is no service or commodity produced by man, however essential it
may seem, the demand for or the supply of which might not be reduced
to nothing, if the price were sufficiently raised on the one hand, or
lowered on the other. How easy it is sometimes to forget this simple
truth may be seen from the mistake so commonly made of supposing,
because the peoples of Central Europe were left, on the cessation of
the war, starving and destitute of the means of life and the materials
of work, that they must necessarily become heavy purchasers of
imported goods; without pausing to consider whether the prices were