*k.*Let the costs of movement between A and B be equated to an annual sum spread over the period during which the unit of resources that has moved may be expected to find profit in staying in its new place. This annual sum is not necessarily the same in respect of movements from A to B and movements from B to A. Transport, for example, "acts more easily down than up hill or stream [and]...the barrier of language acts more strongly from England to Germany than

*vice versa*" (Macgregor,

*Industrial Combination,*p. 24). For the present purpose, however, we may ignore this complication and represent costs in either direction by an annual sum equal to

*n.*Construct a figure in which positive values are marked off to the right of O and negative values to the left. Mark off OM equal to

*k;*and MQ, MP on either side of M each equal to

*n.*It is then evident that the excess of the value of the marginal net product of resources at B over that at A—let this excess be known as

*h*—is indeterminate and may lie anywhere between a value OQ, which may be either positive or negative, and a value OP which may also be either positive or negative. A diminution in the value of

*n*is represented by movements on the part of the two points P and Q towards M. So long as the values

of *k* and *n* are such that P and Q lie on opposite sides of O, it is obvious that these movements make impossible the largest positive and the largest negative values of *h* that were possible before, and have no other effect. When, however, P and Q lie on the same side of O—in which case, of course, all possible values of *h* are of the same sign—they make impossible both the largest values of *h* that were possible before and also the smallest values. This double change seems equally likely to increase or to diminish the value of *h.* Hence, if it were the fact that the points P and Q always lay on the same side of O, we could not infer that diminutions of the value of *n* would be likely to affect the value of *h* either way. In fact, however, it must often happen that P and Q lie on opposite sides of O. When account is taken of these cases as well as of the others, we can infer that, over the mass of many cases, diminutions in the value of *n* are likely to reduce the value of *h.* In other words, diminutions in the costs of movement are likely, in general, to make the values of the marginal net products of resources at A and B less unequal. Furthermore, it is evident that, when the distances MP and MQ are given, the probability that P and Q will both lie on the same side of O and, therefore, the probability that a diminution in the distances MP and MQ will be associated with an increase in the value of *h,* is smaller the smaller is the value of *k.*