is essentially the same as that of the substitution of the crossbred for the merino.  We can take the various possible combinations of the factors of production, and contrast two cases in which different quantities of one factor are employed, together with equal quantities of the others.  The extra product which will be yielded in the case in which the larger quantity of the varying factor is employed can then be regarded as the marginal product (or marginal utility) of the extra quantity of that factor; and we can say that the employment of this factor will be pushed forward to the point where this marginal product will be roughly equal to the price that must be paid for it.  We can thus lay down the most important proposition that the relation between marginal utility and price holds good generally of the ultimate agents of production; that the rent of land, the wages of labor, and, we can even add, the profits of capital tend to equal their (derived) marginal utilities, or, as it is sometimes expressed, their marginal net products.

Whenever, therefore, the proportions in which two or more things are produced or used together can be varied, the relations of joint supply and joint demand are perfectly consistent with a specific marginal cost and marginal utility for each commodity.

Sec.3. A contrast between Cotton and Cotton-seed, and Wool and Mutton.  But it sometimes happens that such variations cannot be made.  Thus, it has not been found possible (so far as I am aware) to alter the proportions in which cotton lint and cotton-seed are yielded by the cotton plant.  Roughly speaking, you get about 2 pounds of cotton-seed for every 1 pound of cotton lint (or raw cotton), and though this proportion may vary somewhat from plantation to plantation, it is upon the knees of the gods, and not upon the will of the planter that the variation depends.  We cannot, therefore, speak with accuracy of the separate marginal costs of raw cotton and cotton-seed.  It is true that some plantations are so far distant from any seed-crushing mill that it is not worth while to sell the seed as a commercial product; and it might seem, therefore, as though we might regard the entire costs of cotton growing on such plantations as constituting the marginal costs of raw cotton.  But planters, so situated, derive a considerable value from their cotton-seed by using it as fodder for their live stock or as a manure.  You can, of course, argue that proper allowance is automatically made for this factor, as a deduction from the costs of raw cotton, when you add up the expenses of the plantation.  In the same way you can deduct the price which a planter who sells his cotton-seed obtains for it, from the total costs of the plantation, and call the remainder the costs of the raw cotton.  But this is really to reason in a circle.  For in either case the magnitude of the deduction depends on the marginal utility of the cotton-seed.  And the notion of the cost of anything becomes blurred and blunted if we so use it that it must be deduced from the utility of something else, which is not an agent in the production of the thing in question.