24 THE GENERAL THEORY OF EMPLOYMENT BK. I

ment to qffer. It is sometimes convenient, when weare looking at it from the entrepreneur’s standpoint, tocall the aggregate income (i.e. factor cost plus profit)resulting from a given amount of employment theproceeds of that employment. On the other hand, theaggregate supply price1 of the output of a givenamount of employment is the expectation of proceedswhich will just make it worth the while of the entre-preneurs to give that employment .2

It follows that in a given situation of technique, re-sources and factor cost per unit of employment, theamount of employment, both in each individual firmand industry and in the aggregate, depends on theamount of the proceeds which the entrepreneurs expectto receive from the corresponding output .3 For entre-

1 Not to be confused (vide infra ) with the supply price of a unit of outputin the ordinary sense of this term.

2 The reader will observe that I am deducting the user cost both from theproceeds and from the aggregate supply price of a given volume of output, sothat both these terms are to be interpreted net of user cost; whereas theaggregate sums paid by the purchasers are, of course, gross of user cost. Thereasons why this is convenient will be given in Chapter 6. The essentialpoint is that the aggregate proceeds and aggregate supply price net of usercost can be defined uniquely and unambiguously; whereas, since user cost isobviously dependent both on the degree of integration of industry and onthe extent to which entrepreneurs buy from one another, there can be nodefinition of the aggregate sums paid by purchasers, inclusive of user cost,which is independent of these factors. There is a similar difficulty even indefining supply price in the ordinary sense for an individual producer; andin the case of the aggregate supply price of output as a vohole serious difficul-ties of duplication are involved, which have not always been faced. If theterm is to be interpreted gross of user cost, they can only be overcome bymaking special assumptions relating to the integration of entrepreneurs ingroups according as they produce consumption-goods or capital-goods,which are obscure and complicated in themselves and do not correspond tothe facts. If, however, aggregate supply price is defined as above net ofuser cost, these difficulties do not arise. The reader is advised, however,to await the fuller discussion in Chapter 6 and its appendix.

3 An entrepreneur, who has to reach a practical decision as to his scaleof production, does not, of course, entertain a single undoubting expectationof what the sale-proceeds of a given output will be, but several hypotheticalexpectations held with varying degrees of probability and definiteness. Byhis expectation of proceeds I mean, therefore, that expectation of proceedswhich, if it were held with certainty, would lead to the same behaviouras does the bundle of vague and more various possibilities which actuallymakes up his state of expectation when he reaches his decision.