It will probably be thought that only in the last paragraph have we come to the normal state of things, and so to the only state of things which has any practical interest for us. All the tedious discussion about peasants selling horses, or buyers and sellers wishing to trade for just one barrel of apples each, is beside the mark, it will be said, when we consider that the questions of value which are of importance to us are questions between the innumerable persons who compete with each other in the business of making and buying and selling, and the innumerable persons who buy goods for their own consumption at fixed prices from the shops. The answer to this has already been suggested. As well might we expect to understand the organisation of industry by taking our stand on an omnibus in Cheapside, and watching the surging life below, as begin our study of the phenomena of value with the smooth-running machinery of exchange which is the growth of generations. The only way to understand the completed theory of value is to go back to the simplest cases of exchange—perhaps even barter; find what principles are involved in all exchange; and then work out the complications and simplifications which come with developed trade. It is impossible to explain the “short cuts” till we know the roundabout road. It will not have escaped the notice of the critical reader that there are many resemblances between the law now formulated and that known as the law of Supply and Demand. It would be strange if there were not. As in ethics, all theories lead very much to one practical code of morals, so theories of price must all be more or less accurate analyses of the actual transactions of the market. For instance, the zone within the limits of which price is determined is, as we have seen, that lying between the valuations of the Marginal Pair. But every one will have noticed that in this zone supply and demand come, quantitatively, to equilibrium, and hence it is quite correct to say that the market price is found in that zone where supply and demand balance each other. The resemblance will become clearer if we look at our individual determinants of price. There is— _1st_, The Extent of Demand,—that is, the number of people who wish to buy goods because they attach a certain value to them. _2d_, The Intensity of Demand,—that is the subjective valuation which these buyers attach to the commodity they wish to obtain, and the subjective valuation of the money they part with. _3d_, The Extent of Supply,—that is, the number of people who wish to sell goods because they attach a certain value to the money they expect to get in exchange. _4th_, The Intensity of Supply,—that is, the valuation which these sellers attach to the money they wish to obtain, and which they attach to the commodity they part with.