The real costs which the price of a commodity measures are not absolute, but comparative.  Marginal money costs reduce themselves in the last analysis to the payments which must be made to secure the use of the requisite agents of productions.  These payments tend to equal the payments which the same agents could have commanded in alternative employments.  The payments which they could have commanded in alternative employments, tend in their turn to equal the derived marginal utilities of their services in those employments.  It is thus the loss of Utility which arises from the fact that these agents of production are not available for alternative employments that is measured by the money costs of a commodity at the margin of production.

This conception of ultimate costs encounters an instinctive repugnance, arising from a mistaken sense of logical symmetry, which it will be well to examine.  Cost, it is objected, so interpreted loses its character as an independent entity.  It is merely something derived from utility.  Now in the earlier chapters of this volume, we found reason to be impressed with the general symmetry which pervades the relations of demand and supply.  Moreover, when we considered the case of ordinary commodities we found that at the back of demand and giving rise to it was utility; at the back of supply, and limiting it, was cost.  The general symmetry between demand and supply thus seemed almost to imply a fundamental symmetry between utility and cost.  If, then, cost in the last analysis is derived from utility, does not this make nonsense of the symmetry between demand and supply, or, if we cling to this last symmetry as a demonstrable truth, must we not refuse to admit that cost can be derived from utility?

This is one of those false dilemmas which supply the wiseacres of the world with a plausible case for distrusting the logical faculty.  If we have good reason for believing that both of two apparently inconsistent things are true, the explanation is seldom that one of them is really false; it is more usually that they are not really inconsistent.  So it is here.  The symmetry between demand and supply is very great, and we should always look to see if it holds good, but it is by no means perfect, and it is in the last analysis that it most notably fails.  It is most important to distinguish clearly between the utility and the cost of a commodity as two separate and independent things.  In Chapter V, it will be remembered, we did not permit ourselves to derive the costs of producing cotton lint from the utility of cotton-seed.  The refusal to do so was essential to clear thought; it led to some very useful practical corollaries.  But to derive the cost of a commodity from the utility of something which is produced with it, as part of the same productive process; and to derive the cost from the utilities which the agents, which help to produce it, possess for other purposes, are