see whether it has a counterpart on the supply side, though indeed we
may not always find one. In the last chapter we examined the relation
between utility and price, and found that the true relation was
between the price and what we termed the marginal utility.
Corresponding to utility on the demand side is cost of
production on the supply side. The question should thus at once
suggest itself--"Can we speak appropriately of the marginal cost of
production, and will this serve to make clear the relation between
cost and price?" To answer these questions, let us take one of the
instances in which we found that price could not be explained
satisfactorily by the bare phrase "cost of production."

An important feature of the coal industry, which recent events have
brought into sharp prominence, is the great diversity of conditions
between different coalfields and different collieries. We speak of
rich seams and poor seams, of fertile and unfertile mines, and we are
aware that the costs of raising coal to the surface differ very widely
in accordance with these diverse natural conditions. Nor must we
confine our attention to the cost price at the pit-head. If we wish to
speak of cost of production as a factor determining price, we must use
the term in a broad sense to include the transport and other charges
necessary to bring the coal to market.

In this respect also one coalfield differs greatly from another. Some
are well situated close to a large market, or within easy reach of the
seaboard; others must incur very heavy transport charges to bring
their coal to any considerable centre of consumption. These varying
conditions lead, as we well know, to great variations in the financial
prosperity of different colliery concerns. In Great Britain, under the
abnormal conditions which prevailed during the war, and subsequently,