Weston's argument, basically said that supply was fixed, and that additional demand, rather than prompting additional supply, could only result in higher market prices. Versions of this argument persist, today, in the form that demand is a function of supply, which is itself, a version of Say's Law.
“Now the most common observation shows than an increased demand will, in some instances, leave the market prices of commodities altogether unchanged, and will, in other instances, cause a temporary rise of market prices followed by an increased supply, followed by a reduction of the prices to their original level, and in many cases below their original level.” (p 26-7)
Prices may fall to below their previous level, in these conditions, because the increased demand, having prompted increased supply, results in economies of scale, falling marginal costs and so on.
“Whether the rise of demand springs from surplus wages, or from any other cause, does not at all change the conditions of the problem. From Citizen Weston's standpoint the general phenomenon was as difficult to explain as the phenomenon occurring under the exceptional circumstances of a rise of wages. His argument had, therefore, no peculiar bearing whatever upon the subject we treat. It only expressed his perplexity at accounting for the laws by which an increase of demand produces an increase of supply, instead of an ultimate rise of market prices.” (p 27)
If we take pocket calculators, for example, in the 1970's, the rising demand for them was not prompted by rising wages, but by the fact that they were a new product, which, whilst not cheap (the first one I bought in 1975, was the equivalent of a days wages for me), were affordable to many people. But, as demand for them rose, so supply rose to meet it, which brought falling marginal costs of production, which fed into lower prices, stimulating further demand and supply.
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