ALL production is for the purpose of ultimately satis­fying a consumer. Time usually elapses, however— and sometimes much timebetween the incurring of costs by the producer (with the consumer in view) and the purchase of the output by the ultimate consumer. Meanwhile the entrepreneur (including both the pro­ducer and the investor in this description) has to form the best expectations1 he can as to what the consumers will be prepared to pay when he is ready to supply them (directly or indirectly) after the elapse of what may be a lengthy period; and he has no choice but to be guided by these expectations, if he is to produce at all by processes which occupy time.

These expectations, upon which business decisions depend, fall into two groups, certain individuals or firms being specialised in the business of framing the first type of expectation and others in the business of framing the second. The first type is concerned with the price which a manufacturer can expect to get for hisfinished” output at the time when he commits himself to starting the process which will produce it; output beingfinished(from the point of view of the manufacturer) when it is ready to be used or to be sold to a second party. The

1 For the method of arriving at an equivalent of these expectations in terms of sale-proceeds see footnote (3) to p. 24 above.