Economics A Contemporary

Introduction 10th Edition McEachern

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CHAPTER 7
PRODUCTION AND COST IN THE FIRM

INTRODUCTION
This chapter describes key characteristics governing how firms operate in the short run and the long run.
Perhaps the most important concepts in the chapter are the shapes and the logic of the short-run and long-run
cost curves. These cost curves will be utilized throughout the microeconomics section to explain the firm’s
supply behavior. The appendix develops the use of input combinations using isocost lines and isoquants.

CHAPTER OUTLINE
I. Cost and Profit: (Slides 3-4)
We assume that producers try to maximize profit.
• Profit: The difference between total revenue and the opportunity cost of resources.
A. Explicit and Implicit Costs
• Explicit costs: Actual cash payments for resources purchased in resource markets.
• Implicit costs: Opportunity costs of using resources owned by the firm or provided by the
firm’s owners.

B. Alternative Measures of Profit (Slides 5-6)

• Accounting Profit: Total revenue minus explicit costs.
• Economic profit: Total revenue minus all costs, both implicit and explicit.
• Normal profit: The accounting profit earned when all resources used by the firm earn their
opportunity cost.

II. Production in the Short Run (Slide 7)

A. Fixed and Variable Resources
• Variable resources: Can be varied quickly to change the output rate.
• Fixed resources: Resources that cannot easily be altered.
• Short run: At least one resource is fixed; the size or scale of the firm is fixed.
• Long run: No resource is fixed; all resources can vary.

B. The Law of Diminishing Marginal Returns (Slides 8-11)

• Production function: The relationship between the amount of resources employed and
total product or output.
• Marginal product: The change in total product resulting from an additional unit of labor.

1. Increasing Marginal Returns: As marginal product increases, the firm experiences

increasing marginal returns from labor because additional workers can specialize and
make more efficient use of the fixed resources.
2. Diminishing Marginal Returns: As more of a variable resource is added to a given
amount of a fixed resource, the marginal product eventually declines and could become
negative.

C. The Total and Marginal Product Curves:

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78 Chapter 7 Production and Cost in the Firm

When marginal product

• Rises, total product increases at an increasing rate.
• Decreases, total product increases at a decreasing rate.
• Is negative, total product is decreasing.

III. Costs in the Short Run: (Slides 12-16)

Definitions:
• Fixed cost: Costs that are independent of output and must be paid even if no output is produced.
• Variable cost: Cost of variable resources
A. Total Cost and Marginal Cost in the Short Run:
1. Total Cost: The sum of fixed cost and variable cost. TC = FC + VC.
2. Marginal Cost: The change in total cost divided by the change in output. MC = ∆TC
/ ∆q.
• Changes in marginal cost (MC) reflect changes in the marginal productivity
(MP) of the variable resource. When marginal returns are increasing, the
marginal cost of output decreases.
• When marginal returns are diminishing, the marginal cost of output
increases.
3. Total and Marginal Cost Curves: The slope of the total cost curve at each rate of
output equals the marginal cost at that rate of output. Review Exhibit 5 in text.

B. Average Cost in the Short Run (Slide 17)

• Average Variable Cost: Variable cost divided by output or VC/q
• Average Fixed Cost: Fixed cost divided by output or FC/q
• Average Total Cost: Total cost divided by output or TC/q

C. The Relationship Between Marginal Cost and Average Cost: (Slides 18-20) Marginal cost
pulls down average cost where marginal cost is below average cost and pulls up average cost
where marginal cost is above average cost.

D. Summary of Short-Run Cost Curves: The law of diminishing marginal returns determines
The shape of short-run cost curves:
• When the marginal product of labor increases, the marginal cost of output falls.
• When marginal cost is less than average cost, average cost falls.
• When marginal cost is above average cost, average cost rises.

IV. Costs in the Long Run: (Slide 21) Long-run is best thought of as a planning horizon.

A. Economies of Scale (Slide 22)

• Long-run average cost curves are U-shaped because of economies and diseconomies of
scale.
• Forces that reduce a firm’s long run average cost as the scale of operation increases.
B. Diseconomies of Scale:
• Forces that increase a firm’s long run average cost as the scale of operation increases
C. The Long-Run Average Cost Curve: (Slides 23-25) The curve indicating the lowest
average cost of production at each rate of output as the firm size is varied.
• Each short-run average cost curve is tangent to the long-run average cost curve.

Case Study: Scale Economies and Diseconomies at the Movies (Slide 26)

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 Chapter 7 Production and Cost in the Firm 79

• Constant Long-Run Average Cost: (Slides 27-28) Long-run average cost neither
increases nor decreases with changes in firm size.
• Minimum Efficient Scale: The lowest rate of output at which a firm takes full advantage
of economies of scale.

D. Economies and Diseconomies of Scale at the Firm Level (Slide 28)

Case Study: Scale Economies and Diseconomies at McDonald’s (Slides 29-30)

Appendix: A Closer Look at Production and Costs (Slides 29-40)

I. The Production Function and Efficiency
• Production function: Identifies the most that can be produced per time period using various
combinations of resources, for a given level of technology.
• Technologically efficient: The production of the maximum possible output given the combination
of resources employed.

II. Isoquants: Curves that show all the technologically efficient combinations of two resources that
produce a certain rate of output.
• Greater rates of output are represented by isoquants farther from the origin.
• Have negative slopes.
• Do not intersect.
• Are usually convex to the origin.
• Have a slope that is the marginal rate of technical substitution (MRTS), which is the rate at which
labor can be substituted for capital without affecting output. MRTS = MPL / MPC.

III. Isocost Lines: Identify all combinations of capital and labor the firm can hire for a given total cost.
• Slope = (TC/r) / (TC/w) = w/r = ratio of the input prices.
• Parallel because each reflects the same relative resource prices.

IV. The Choice of Input Combinations: For a given rate of output, the firm minimizes its total cost by
choosing the lowest isocost line that is tangent to the isoquant.

V. The Expansion Path: Indicates the lowest long-run total cost for each rate of output.

CONCLUSION
Two relationships between resources and output underlie all the curves in this chapter. In the short run, it's in-
creasing and diminishing returns from the variable resource. In the long run, it's economies and diseconomies
of scale.

CHAPTER SUMMARY
Explicit costs are opportunity costs of resources employed by a firm that take the form of cash payments.
Implicit costs are the opportunity costs of using resources owned by the firm. A firm earns a normal profit
when total revenue covers all implicit and explicit costs. Economic profit equals total revenue minus both
explicit and implicit costs.

Resources that can be varied quickly to increase or decrease output are called variable resources. In the short
run, at least one resource is fixed. In the long run, all resources are variable.

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80 Chapter 7 Production and Cost in the Firm

A firm may initially experience increased marginal returns as it takes advantage of increased specialization of
the variable resource. But the law of diminishing marginal returns indicates that the firm eventually reaches a
point where additional units of the variable resource yield an ever-smaller marginal product.

The law of diminishing marginal returns from the variable resource is the most important feature of production
in the short run and explains why marginal cost and average cost eventually increase as output expands.

In the long run, all inputs under the firm’s control are variable, so there is no fixed cost. The firm’s long-run
average cost curve, also called its planning curve, is an envelope formed by a series of short-run average total
cost curves. The long run is best thought of as a planning horizon.

A firm’s long-run average cost curve, like its short-run average cost curve, is U-shaped. As output expands,
average cost at first declines because of economies of scale—a larger plant size allows for bigger and more
specialized machinery and a more extensive division of labor. Eventually, average cost stops falling. Average
cost may be constant over some range. If output expands still further, the plant may experience diseconomies
of scale as the cost of coordinating resources grows. Economies and diseconomies of scale can occur at the
plant level and at the firm level.

In the long run, a firm selects the most efficient size for the desired rate of output. Once the firm’s size is
chosen, some resources become fixed, so the firm is back operating in the short run. Thus, the firm plans for
the long run but produces in the short run.

TEACHING POINTS
1. This chapter presents the construction of cost curves for the individual firm. Students who master this
material should have no problem understanding the sections of the text dealing with market structure.
The cost curves discussed in this chapter are inherently quantitative, and those students with weaker math
backgrounds need exercises that force them to derive average cost and marginal cost from the basics. The
online materials and the Study Guide provide additional exercises and also help students learn how to
utilize graphic techniques—something that will be essential in the discussion of competitive equilibrium.

2. The chapter begins with a discussion of the meaning of the total and marginal products of labor, which is
the only variable resource considered in the short run. Exhibit 2 shows the relationship between labor
employed and output generated. Note that both increasing and diminishing returns are discussed. Point
out that marginal product can be negative while total product is still positive. Ask the students to explain
how this can happen.

3. It should not be hard to explain the concept of diminishing marginal returns. It is important to emphasize
that the additional units of the variable resource are not less capable than earlier units. As an example,
you might have students think about how total output at a fast food restaurant will change as additional
workers are added.

4. Exhibit 4 is particularly useful for class discussion. Some students find the numerical examples
particularly illuminating. An interesting way to approach this material is to leave certain parts of the
table blank and ask students to use the filled-in parts to guide them in completing the table. You need
delete only one table entry per line to make this an interesting exercise.

5. Exhibit 5 shows the relationship between the total cost curve and the marginal cost curve. Because
marginal cost is the slope of the total cost curve, it is natural to use the word slope in the classroom.
Another word that might prove illuminating for students is steepness. As the total cost curve becomes
steeper, marginal cost increases.

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 Chapter 7 Production and Cost in the Firm 81

6. Exhibits 6 and 7 are crucial to understanding cost in the short run and must be covered with great care.
Because the marginal cost curve ultimately drives the variable and total cost curves, understanding why
diminishing marginal productivity leads to increasing marginal costs is absolutely essential. Once this is
understood relating marginal to average results in the characteristic U-shaped average variable and
average total cost curves. A clear way to depict the relationship between marginal and average is to use
the impact on the average class height when a tall or short student joins the class.

7. The long-run average cost curve should be presented as an envelope curve based on selection of the best
scale of production from the many possible scales for each output level on the basis of cost. The shape of
the long-run curve then does not depend on diminishing marginal product but on the existence of
economies and diseconomies of scale.

ANSWERS TO END-OF CHAPTER QUESTIONS AND EXERCISES

Answers to Questions for Review
1. (Explicit and Implicit Costs) Amos McCoy is currently raising corn on his 100-acre farm and earning an
accounting profit of $100 per acre. However, if he raised soybeans, he could earn $200 per acre. Is he
currently earning an economic profit? Why or why not?

Amos McCoy is not currently making an economic profit, despite the fact that he is making an
accounting profit. This is so because the accounting profit calculation does not take into account an
important implicit cost—the opportunity cost of not raising soybeans. Actually, McCoy is experiencing
an economic loss. According to our theory, he should get out of the corn business and begin growing
soybeans. This question highlights the important distinction between accounting profit and economic
profit.

2. (Explicit and Implicit Costs) Determine whether each of the following is an explicit cost or an implicit
cost:
a. Payments for labor purchased in the labor market
b. A firm’s use of a warehouse that it owns and could rent to another firm
c. Rent paid for the use of a warehouse not owned by the firm
d. The wages that owners could earn if they did not work for themselves

a) explicit; b) implicit; c) explicit; d) implicit

3. (Alternative Measures of Profit) Calculate the accounting profit or loss as well as the economic profit or
loss in each of the following situations:
a. A firm with total revenues of $150 million, explicit costs of $90 million, and implicit costs of $40
million
b. A firm with total revenues of $125 million, explicit costs of $100 million, and implicit costs of $30
million
c. A firm with total revenues of $100 million, explicit costs of $90 million, and implicit costs of $20
million
d. A firm with total revenues of $250,000, explicit costs of $275,000, and implicit costs of $50,000

a. Accounting profit = $60 million; economic profit = $20 million

b. Accounting profit = $25 million; economic loss = –$5 million
c. Accounting profit = $10 million; economic loss = –$10 million
d. Accounting loss = –$25,000; economic loss = –$75,000

4. (Alternative Measures of Profit) Why is it reasonable to think of normal profit as a type of cost to the
firm?

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82 Chapter 7 Production and Cost in the Firm

Recall that firms produce output using four kinds of resources: natural resources, labor, capital, and
entrepreneurial ability. The owner of the firm supplies some of the resources that the firm employs.
Normal profit is the return to the entrepreneurial ability and other resources supplied by the firm’s
owners. If this profit is not as large as those individuals could earn in their best alternative situation,
they will switch the resources to that alternative. So, we can think of normal profit as being the minimum
return, or cost, that is necessary to keep the firm running.

5. (Short Run Versus Long Run) What distinguishes a firm’s short-run period from its long-run period?

In the short run, at least one of the firm’s resources is fixed, usually the size of the firm. In the long run,
all the resources are variable. That is, the quantities of all resources can change to alter the firm’s level
of output, including the size of the firm.

6. (Law of Diminishing Marginal Returns) As a farmer, you must decide how many times during the year to
plant a new crop. Also, you must decide how far apart to space the plants. Will diminishing returns be a
factor in your decision making? If so, how will it affect your decisions?

The law of diminishing marginal returns says that, the more of a variable resource that is combined with
a given amount of a fixed resource (land in this case), marginal product (crop) will eventually decline.

Diminishing returns will result from growing crops too close together or planting too many times in one
year. Placing crops too close together deprives them of sufficient nutrients to grow. More plants grow,
but each produces smaller and fewer fruits or vegetables. If crops are not rotated and sufficient time is
not allowed for the soil to regain its nutrients, subsequent harvests will be smaller. For this reason,
farmers often allow a field to go fallow, planting it with grass or nitrogen-rich plants.

7. (Marginal Cost) What is the difference between fixed cost and variable cost? Does each type of cost
affect short-run marginal cost? If yes, explain how each affects marginal cost. If no, explain why each
does or does not affect marginal cost.

Fixed cost is a short-run phenomenon. It does not vary as output varies, and the firm must pay fixed costs
in the short run even if output is zero. Variable cost is associated with the firm’s variable resources. As
output varies, usage of the variable resources varies. Thus, variable cost rises as output rises and falls as
output falls. If output is zero, variable cost is zero. Because marginal cost measures the change in total
cost as output changes by one unit, it is affected by variable cost only. By definition, fixed cost does not
change in the short run and thus has no impact on short-run marginal cost.

8. (Marginal Cost) Explain why the marginal cost of production must increase if the marginal product of
the variable resource is decreasing.

A decrease in the marginal productivity of a variable resource means that the additional output from
each additional unit of the variable resource is getting smaller. Because each additional unit of the
variable resource adds the same amount to the total cost of production (i.e., this added cost equals the
unit price of the variable resource), the marginal cost of each additional unit of output must be
increasing.

9. (Costs in the Short Run) What effect would each of the following have on a firm’s short-run marginal
cost curve and its total fixed cost curve?
a. An increase in the wage rate
b. A decrease in property taxes
c. A rise in the purchase price of new capital
d. A rise in energy prices

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 Chapter 7 Production and Cost in the Firm 83

a. This shifts the marginal cost curve upward and to the left. It would have no effect on fixed cost.
b. This shifts the fixed cost curve downward but has no effect on marginal cost.
c. This shifts the fixed cost curve upward but has no effect on marginal cost.
d. This shifts the marginal cost curve upward. It would have no effect on fixed cost.

10. (Costs in the Short Run) Identify each of the curves in the following graph:

C
B A

A = average variable cost; B = average total cost; C = marginal cost.

11. (Marginal Cost and Average Cost) Explain why the marginal cost curve must intersect the average total
cost curve and the average variable cost curve at their minimum points. Why do the average total cost
and average variable cost curves get closer to one another as output increases?

If average cost is falling, marginal cost must lie below average cost. If average cost is rising, marginal
cost must lie above average cost. An average can increase only if the marginal amount is greater than
the previous average. Average total cost (ATC) and average variable cost (AVC) differ only by average
fixed cost (AFC), which is the fixed cost divided by quantity. As quantity increases, fixed cost divided by
quantity must fall, and ATC and AVC approach each other.

12. (Marginal Cost and Average Cost) In Exhibit 7 in this chapter, the output level where average total cost
is at a minimum is greater than the output level where average variable cost is at a minimum. Why?

As output increases, the average fixed cost (AFC) must fall. Therefore average total cost (ATC) is pulled
down by the AFC falling, with the increase in Q, because ATC = AVC + AFC. After AVC begins to
increase, ATC will still fall to the extent that AFC falls faster than AVC rises. Eventually AVC rises
faster than AFC falls, leading to an increase in ATC, but at a quantity larger than that associated with
minimum AVC.

13. (Long-Run Average Cost Curve) What types of changes could shift the long-run average cost curve?
How would these changes also affect the short-run average total cost curve?

The long-run average cost curve is determined by the technology of production and by resource prices.
For example, if there is a change in technology that increases the degree of returns to scale to the firm,
the long-run average cost curve shifts downward. Similarly, if the entry of firms into an industry causes
resource prices to rise, the long-run average cost curve shifts upward. In the first case, some of the
short-run average total cost curves shift downward (because of increasing returns to scale). In the
second case, all short-run average total cost curves shift upward.

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84 Chapter 7 Production and Cost in the Firm

14. (Long-Run Average Cost Curve) Explain the shape of the long-run average cost curve. What does
“minimum efficient scale” mean?

The shape of the long-run average cost curve is related to economies and diseconomies of scale.
Economies of scale are factors that cause long-run average cost to fall as output expands. Diseconomies
of scale are factors that cause long-run average cost to rise as output expands. The minimum efficient
scale is the lowest rate of output at which long-run average cost is at a minimum. Constant long-run
average cost may occur at some plant sizes above the minimum efficient scale. Eventually, diseconomies
of scale become powerful enough to cause rising long-run average cost.

15. (CaseStudy: Scale Economies and Diseconomies at the Movies) The case study states that the concession
stand accounts for well over half the profits at most theaters. Given this, what are the benefits of the
staggered movie times allowed by multiple screens? What is the benefit to a multiscreen theater of
locating at a shopping mall?

A benefit of staggered movie times in a multiple-screen operation is that the concession stand can
operate for longer periods of time than it could when only one feature film was shown. Locating at a
shopping mall provides easy access and parking facilities that multiscreen operations located on their
own can’t necessarily offer.

16. (Scale Economies and Diseconomies) In analyzing scale economies and diseconomies, what's the
difference between the plant level and the firm level?

The plant level is a single location or business, but the firm level is a group of plants or businesses. For
example, one movie theatre versus a chain of movie theatres illustrates the plant versus firm levels.
Large firms do whatever possible to reduce diseconomies of scale.

Answers to Problems and Exercises

17. (Production in the Short Run) Complete the following table. At what point does diminishing marginal
returns set in?
Units of the
Variable Resource Total Product Marginal Product
0 0 —
1 10 —
2 22 —
3 — 9
4 — 4
5 34 —

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 Chapter 7 Production and Cost in the Firm 85

Units of the
Variable Resource Total Product Marginal Product
0 0 —
1 10 10
2 22 12
3 31 9
4 35 4
5 34 –1
The law of diminishing returns states that, as units of a variable resource are added to fixed
quantities of other resources, the resulting increases in total output eventually become smaller and
smaller. Diminishing marginal returns occur after the second unit of the variable resource is
employed.

18. (Total Cost and Marginal Cost) Complete the following table, assuming that each unit of labor costs $75
per day.
Quantity
of Labor Output Fixed Variable Total Marginal
per Day per Day Cost Cost Cost Cost
0 $___ $300 $____ $____ $___
1 5 ___ 75 ___ 15
2 11 ___ 150 450 12.50
3 15 ___ ___ 525 ___
4 18 ___ 300 600 25
5 20 ___ ___ ___ 37.50

a. Graph the fixed cost, variable cost, and total cost curves for these data.
b. What is the marginal product of the third unit of labor?
c. What is average total cost when output is 18 units per day?

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86 Chapter 7 Production and Cost in the Firm

Quantity
of Labor Output Fixed Variable Total Marginal
per Day per Day Cost Cost Cost Cost
0 0 $300 $0 $300 —
1 5 300 75 375 15
2 11 300 150 450 12.50
3 15 300 225 525 18.75
4 18 300 300 600 25
5 20 300 375 675 37.50

a.

b. The marginal product is 4.

c. The average total cost is $33.33.

19. (Total Cost and Marginal Cost) Complete the following table, where L is units of labor, Q is the rate of
output, and MP is the marginal product of labor.

L Q MP VC TC MC ATC
0 0 ____ $ 0 $120 $__ $__
1 6 ____ 30 150 ___ ___
2 15 ____ 60 ___ ___ ___
3 21 ____ 90 ___ ___ ___
4 24 ____ 120 ___ ___ ___
5 26 ____ 150 ___ ___ ___

a. At what level of labor input do the marginal returns to labor begin to diminish?
b. What is the average variable cost when Q = 24?
c. What is this firm’s fixed cost?
d. What is the wage rate per day?

This question demonstrates the relationships between marginal product and marginal costs as well as
between marginal and average total costs. The student should supply the missing numbers for MP, TC,
MC, and ATC as shown in italics in the following table:

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 Chapter 7 Production and Cost in the Firm 87

L Q MP VC TC MC ATC
0 0 — $ 0 $120 — —
1 6 6 30 150 $5.00 $25.00
2 15 9 60 180 3.33 12.00
3 21 6 90 210 5.00 12.00
4 24 3 120 240 10.00 10.00
5 26 2 150 270 15.00 10.38

a. Diminishing MP occurs with the third unit of labor.

b. When output is 24, total variable cost is $120. Thus, average variable cost is $5.00.
c. Because total cost is $120 when output is zero, fixed cost must be $120.
d. Each unit of labor increases VC by $30, and therefore the wage rate is $30.

20. (Relationship Between Marginal Cost and Average Cost) Assume that labor and capital are the only
inputs used by a firm. Capital is fixed at 5 units, which cost $100 each per day. Workers can be hired for
$200 each per day. Complete the following table to show average variable cost (AVC), average total cost
(ATC), and marginal cost (MC).

Quantity of
Labor Total Output AVC ATC MC
0 0 $___ $___ $___
1 100 ____ ____ ____
2 250 ____ ____ ____
3 350 ____ ____ ____
4 400 ____ ____ ____
5 425 ____ ____ ____

Quantity of
Labor Total Output AVC (VC/Q) ATC(TC/Q) MC(∆TC/∆Q)
0 0 — — —
1 100 $2.00 $7.00 $2.00
2 250 1.60 3.60 1.33
3 350 1.70 3.14 2.00
4 400 2.00 3.25 4.00
5 425 1.18 3.53 8.00

Students must calculate variable cost, which is $200 per worker, and fixed cost, which is given as 5
units at a cost of $100 each.

21. (Long-Run Costs) Suppose the firm has only three possible scales of production as shown below:

a. Which scale of production is most efficient when Q = 65?

b. Which scale of production is most efficient when Q = 75?
c. Trace out the long-run average cost curve on the diagram.

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88 Chapter 7 Production and Cost in the Firm

a. ATC2
b. ATC2
c. The long-run average cost curve (the thicker curve) shows the lowest cost for each output level (i.e.,
it coincides with ATC1 up to 40 units, with ATC2 from 40 to 120 units, and with ATC3 for output
above 120 units).

Answers to Appendix Questions

1. (Choice of Input Combination) Suppose that a firm’s cost per unit of labor is $100 per day and its cost
per unit of capital is $400 per day.
a. Draw the isocost line for a total cost per day of $2,000. Label the axes.
b. If this firm is producing efficiently, what is the marginal rate of technical substitution between labor
and capital?
c. Demonstrate your answer to part (b) using isocost lines and isoquant curves

a.

b. The MRTS is the slope of an isoquant. In equilibrium, it equals the slope of the isocost line, which in
this example is –1/4.

c.

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 Chapter 7 Production and Cost in the Firm 89

In this diagram, all other points on isoquant Q involves a higher isocost. Isoquant Q is tangent to the
cost line at point e. Thus, its slope matches the slope of the isocost line. That is, the marginal rate of
technical substitution is –1/4, and this is the maximum output possible at a cost of $2,000.

2. (The Expansion Path) How are the expansion path and the long-run average cost curve related?

The expansion path indicates the lowest long-run total cost for each level of output. The long-run
average cost curve indicates the lowest long-run average cost for each level of output. Thus, both
devices indicate how the firm’s costs vary with long-run changes in plant size, given resource prices
and the level of technology.

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glittered among the cherry blossoms, as if they were set in
diamonds; the low rush-covered marshes were sprinkled with herds
of cattle, and the doves were cooing in the dense woods that
overlooked the misty blue plains. The travellers encountered many
groups of hill folk, going to work among the cultivated patches lower
down, or in the neighbouring tea-gardens, as they passed through a
village, a flock of delightful little brown children sallied out and tossed
freshly plucked monthly roses into the ladies’ laps, “so charmingly
Arcadian and simple,” thought Honor. But she was disillusioned, by
the same little brown elves pursuing them for half a mile, with shrill
demands for “Bucksheesh! bucksheesh!”
As they toiled upwards, the day grew perceptibly warmer, the
ascent steeper. At twelve o’clock they halted by a mountain stream
under some evergreen oaks, and there found an excellent repast
awaiting them. Mrs. Brande’s portly cook had girded up his loins, and
hastened by short cuts and by-paths, and now lay in ambush with
this welcome repast of fowl, cold pie, rolls and coffee; claret and
hock were cooling in a neighbouring stream.
There was some satisfaction in being escort to Mrs. Brande, who
sat on a box, presiding over the table-cloth, and looking the
embodiment of gratified hospitality. When the meal had come to an
end and the men were smoking, she said—
“What’s that in your dandy, Honor? I see you taking as much care
of it as if it was some great treasure; not your new hats, I hope?” in a
tone of real concern.
“No, aunt; it is my violin—a much more important affair.”
 “Nonsense, child! Why did you not leave it with the heavy
baggage?”
“Because it might have been smashed.”
“Well, if it was, it could be mended. We have a very clever Maistry
carpenter at Shirani. I often give him little jobs. My butler—a
Goanese—has a fiddle, too, and of an evening I hear him giving the
other servants a benefit.”
“Perhaps he and I may play duets,” remarked Honor, demurely.
“My dear child!” with a deeply horrified air. “How can you talk in
such a wild way? Captain Waring is shocked—ain’t you, captain?”
“Dreadfully scandalized; and I will only condone the outrage to my
feelings on one condition, that Miss Gordon plays us a solo. Will you,
Miss Gordon? This is the hour and the place.”
Mrs. Brande naturally expected that her niece would require at
least a quarter of an hour’s incessant pressing; and, indeed, in spite
of what the Hodsons had told her, this benighted old person was not
at all sure that it was the correct thing for a woman to play the fiddle.
“Would Mrs. Langrishe allow her girl to do it?” and visions of her own
fat black butler, squatting outside the house in the cool of the day
playing jigs and reels to a circle of enraptured syces and chuprassis,
rose before her mind’s eye!
This vision was quickly dispelled by another. Honor longed for the
sound of her beloved violin, her present audience were not
formidable, and she was not the least nervous. Last time she had
held her fiddle and bow it had been a dull wet afternoon at home—a
type of the worst grey, sullen, English weather. She had played to
them in the drawing-room Schubert’s “Adieu.” Yes, and her mother
had wept. Now, what a different scene, and different listeners! Two
men, almost strangers, prone on the grass, lazily expectant, and, as
far as Captain Waring was concerned, condescendingly ready to be
entertained; a stout lady sitting on a wine-case, with her napkin on
her knee, and her topee quite at the back of her head; a distant
group of scarlet-and-white clad servants; and all around a scene fit
to encircle Orpheus himself. Range after range of purple-blue hills,
rising out of rhododendron and oak forests, a rival across the valley
in the shape of a cuckoo, otherwise a waiting, sympathetic silence.
As the girl took the violin out of its case, Captain Waring could see
that it was in hands that loved it; and noted, moreover, that the said
hands were beautiful—the wrists most daintily modelled. Soon the
bow began to call forth heavenly sounds.
Honor stood up, leaning carelessly against the trunk of a tree, and
seemed wholly unconscious of her audience; her face, which was
turned towards the hills, gradually assumed a rapt exalted
expression, and her playing was in keeping with her attitude and her
eyes. The performance was a revelation—a mixture of great
simplicity, with a distinct note of human passion in its strain. Surely
the music was the voice of this girl’s sweet soul!
The servants boldly came near to hear this new “Miss Sahib” who
drew such marvellous strains from the “sitar.” The very ponies
pricked their ears, a rambling hill cow halted to listen, the competitive
cuckoo was dumb.
The two young men gradually dropped their cigarettes. Mrs.
Brande dropped her jaw. Why, her niece played as well as a man at
a concert! Even better, in her opinion, for this was a tune that
touched her, and that she could understand; those sweet wailing
notes, resembling a human voice, penetrated her opaque
sensibilities, and wafted her to the very gates of Paradise.
Captain Waring surveyed with unaffected curiosity this fair young
musician, with his elbows dug into the grass, his chin resting on his
hands. He knew something about music; the girl played with faultless
taste and absolute purity of tone. He was listening to “linked
sweetness long drawn out” rendered with truly expressive charm.
Here was not the common or ordinary Indian spin, but a modern
Saint Cecilia! He glanced at Mark, to see how this unexpected
transformation had affected him; but Mark’s face was averted, and
he gave no sign, though in reality he was enjoying a debauch of
exquisite musical thoughts.
 Presently the spell, a weird Russian air, died away in a long
sobbing sigh, and, save for a murmur among the servants, there
ensued quite a remarkable pause, broken at length by Mrs. Brande,
who exclaimed as if she had suddenly awoke—
“Very pretty indeed! And how did you like it, Captain Waring?”
“Like it!” he echoed indignantly. “My dear madam, what a feeble
and inadequate expression! Miss Gordon plays magnificently.”
“Oh indeed, no,” she protested. “I can play music that I can feel—
and that is easy, and I began to learn the violin when I was four
years old, so that my fingers are pretty supple; but when I think of
other people’s playing, such as Sarasate, I realize that I am nothing
more than a well-meaning amateur, and never will be otherwise. I
cannot master any excessive technical difficulties. I have no
brilliancy—still,” with a happy little sigh, “I am glad that you liked it.”
“Yes, my dear,” said her aunt, nodding her head approvingly. “And
now let us have something lively. Suppose you play a polka?”
But the violin was already in its case. Honor had laid it there with
the air of a mother consigning an infant to its rest.
“Oh, Miss Gordon, what a shame!” expostulated Mark Jervis. “I
could lie on this sunny slope, under the rhododendrons, listening to
you for days.”
“You would not find it very comfortable in the rains,” remarked Mrs.
Brande, with some asperity. She did not approve of penniless young
men thus launching compliments at her accomplished niece. “And
now we had better be getting on, if we are to reach Binsa before
dark.”
The next and last day of their march the party were proceeding as
usual in pairs; Honor and Captain Waring led the van, whilst Jervis
and Mrs. Brande, who was a heavy load, lagged behind. The further
they journeyed, the steeper grew the precipices, the wilder the
scenery, the narrower the paths. At one place in the woods, high
above them, grazed a herd of so-called tame buffaloes—tame with
natives, wild with Europeans. The huge bull, with his hairy head and
enormous horns—though he carried a bell—was tame with no one!
Hearing strange voices below, he lifted up his hideous china-blue
eyes, stared fiercely about him, and then came crashing downhill for
some dozen yards, but his prey—Honor and her escort—had already
passed by, and were out of reach. He stood still in a meditative
attitude, and gave vent to an angry and disappointed bellow.
After a considerable interval, another group came into view. Mrs.
Brande’s gay jampannis and scarlet dandy rug settled the question.
In half a moment he had blundered through the undergrowth, and
placed himself in a warlike attitude upon the path—exactly six yards
ahead of the party. The unanimity with which Mrs. Brande’s bearers
dropped her, and fled up trees, was only equalled by the agility
displayed by the lady herself, in leaping out of the dandy and
scrambling down the khud! Nothing remained on the track but the
empty vehicle, the buffalo, and Jervis.
He promptly jumped off his pony, snatched up a jampanni’s pole,
on the end of which he raised the red rug, and boldly advanced like a
matador in the arena. When the bull lowered his ponderous head to
charge, he threw the rug over his horns with as much coolness and
dexterity as if he had merely to deal with a stuffed animal! But this
animal was dangerously animated. Rushing furiously forward, he
tumbled blindly over the dandy, and with a loud crash, rolled down
the khud, which, luckily for him (and Mrs. Brande) was not of sheer
descent. The lady’s piercing screams attracted the notice of her
niece, and—of what was far more to the purpose—the boy who was
in charge of the herd. Probably he had been fast asleep, but he now
came racing through the brushwood, routed up the buffalo, whose
fall had undoubtedly quenched his spirit, and drove him away, laden
with the hearty curses of the jampannis. These valiant gentlemen
had now descended to mother earth, as brave as lions. The rug was
in ribbons, the dandy in matchwood, but no one was injured. “What
was to be done?” inquired Captain Waring, vainly struggling to
preserve a grave countenance, as he saw Mrs. Brande, who
presented a truly distressing spectacle, emerging from the bushes,
on her hands and knees. The back of her dress was split right across
the shoulders, her veil hung round her neck, and she was covered
with sand and bits of twigs.
 Mark had hastened to her assistance, and her niece, as she
picked up her topee and umbrella, asked anxiously “if she was hurt?”
“No,” she panted, sitting down and dusting herself with her
handkerchief, “I’m not a bit the worse.”
“But your dandy is in smithereens!” said Captain Waring. “What is
to be done?”
“I know what has been done. Young man,” solemnly addressing
herself to Jervis, “you saved my life, as sure as I sit here, and you
stand there. If you had not had the courage to throw the rug over his
head, he would have come down the khud, and gored me to death—
I’m not a woman of many words” (fond delusion) “but I won’t forget it
—nor will P.” In moments of unusual excitement, or when with her
intimates, she invariably spoke of her husband as “P.”
“Oh, Mrs. Brande,” he replied, “you think a great deal too much of
it—it was only a buffalo.”
“Only a buffalo!” she repeated. “You little know them; in another
minute I’d have been only a corpse. They are the most dangerous
brutes you can come across, and so cunning. Ha,” changing her
voice to another and sharper key, “Jait Sing, you base coward! I shall
cut every one’s pay two rupees. I’ve a mind to stop your wood
tickets. What a contrast to you,” she pointed her fat finger straight at
Jervis. “Lions, indeed, as all these Sings call themselves—pretty
lions—you are the bravest young man I ever saw!”
“Oh come, I say, Mrs. Brande,” expostulated Waring, playfully.
“You don’t know what I could do if I tried.”
“Well, as you did not try, I cannot say,” she answered dryly.
“It’s not such a marvellous feat, driving off an old buffalo——”
“Depends upon the humour the buffalo is in; and I’m surprised at
you belittling your own cousin, instead of being proud of him,”
pursued the lady with considerable heat, and entirely forgetting her
intended rôle with respect to this millionaire.
“How are you to get on, aunt?” inquired Honor; “but of course you
must go in my dandy and I can walk.”
 “By no means, Miss Gordon; you shall ride my pony,” said Captain
Waring. “He has a grand roomy old saddle and a fine broad back,
and I will hold you from slipping off.”
To this arrangement Mrs. Brande (who had now recovered her
composure and her wits) saw no objection. Quite the contrary, it was
a capital idea. As for herself, she felt so shattered and so nervous,
that she could not allow Mr. Jervis out of her sight.
They were now within seven miles of Shirani, and oh! what
interminable miles—they seemed leagues—leagues of dreary
monotonous road, winding and twisting round barren fawn-coloured
hills, and apparently taking them straight into the very heart of Asia.
They wound up and down valleys, to the crest of a range, which hid,
as they fondly hoped, long-looked-for Shirani. Alas! it but gave them
a view of yet another valley—yet another rounded hill slope. Honor
was not surprised to hear that a lady of her aunt’s acquaintance, on
her first visit, had, after a series of these maddening
disappointments, collapsed on the journey, and given way to a storm
of hysterical tears. Sometimes Honor walked—walked by
preference, but at others, she mounted the pony in deference to her
chaperon’s wishes. She did not enjoy her ride, it consisted of a
gradual slide, slide, slide, a recover, then slide, slide, again. She
declined Captain Waring’s eagerly tendered arm—support was twice
as irksome as walking. Would this detestable road never, never,
come to an end?
Ah, there were the pine trees of Shirani at last! In another twenty
minutes, they were among them. As the little party debouched into
the mall, Mrs. Brande heading the procession, Honor bringing up the
rear, with Captain Waring leading her pony, they came face to face
with Mrs. Langrishe, walking with her most stately air, between a
soldierly looking man and a small, beautifully dressed, fair-haired
girl.
Yes, she could not have failed to notice and take in the full
significance of Mrs. Brande’s rentrée (indeed she and her rival had
exchanged bows), and dusty, hot, and thirsty, as that lady was, this
was one of the happiest and proudest moments of her life!
 CHAPTER XVI.
A MESSAGE FROM MISS PASKE.

Although she had only caught a fleeting vision of Mrs. Brande’s

niece, Mrs. Langrishe had sharp eyes, and one glance had been
sufficient to assure her that the girl was not the least like what she
had expected. She was slim and dark, and, though covered with
dust, and wearing a frightful one rupee topee, undeniably a lady, and
not at all of the dairymaid type.
And how exultant the old woman had looked! Literally puffed out
with pride, as she was carried past, with the millionaire in close
attendance. Not that that detail was of the slightest consequence.
Lalla knew him intimately, and she would get her to write him a nice,
friendly little note, and ask him to drop in to tea.
Meanwhile Honor had been presented to her uncle, who, far from
being disappointed, was agreeably surprised to find that she was the
image of his favourite sister Hester, who had died when she was
eighteen. This resemblance (which he kept to himself) ensured the
new arrival an immediate entrée to her uncle’s good graces. And
Mrs. Brande, accustomed to his cool and rather cynical manner, was
amazed at the warmth of the reception he accorded to his hitherto
unknown niece.
For several days the young lady was kept at home in strict
seclusion, until her complexion had recovered the journey and her
boxes had arrived from the railway. Her aunt was determined not to
submit her treasure to the fierce gaze which beats upon a newly
arrived girl, until she was altogether at her best. She, however, could
not close her doors to numerous ladies who came to call upon Miss
Gordon, and thus secure an early and private view. Honor was
compelled to sit in state in a hideous drawing-room, where every
colour was shouting at another, and listen to her aunt telling visitors
how beautifully she played the fiddle, and what long hair she had,
and how she took threes in shoes, and how useful she was in the
house already. Also, she did not spare them full particulars of the
buffalo adventure, nor fail to sing loud praises of Mr. Jervis, or to
enlarge on his cousin’s agreeable escort and particular attentions en
route. Then Mrs. Brande discussed her servants and the outrageous
price of ghee and charcoal.
“Come, let us sit in the verandah,” whispered Mrs. Sladen, who
had read the girl’s expressive face. “You will get quite used to it,” she
continued, when they were outside; “you will do it yourself some day.
We all do; but you will have a very happy home here, in spite of the
price of potatoes! Your aunt is delighted with you, as you may see,
and you will soon have plenty of topics to discuss. She has been
lonely enough till now. She and Mr. Brande, although much attached
to one another, have few tastes in common. He is fond of literature,
and devoted to tennis and rackets; and although he is older, he is so
active that he seems years her junior. Your coming has given her a
fresh start and new pleasures. She is a dear, good woman, and as
single-hearted as a little child.”
Mrs. Sladen and Honor had taken to one another at once. Honor
had been down (after dusk) to Mrs. Sladen’s house—been
presented to Colonel Sladen, and shown the photographs of Mrs.
Sladen’s little girls—Charlotte and Mabel, and had heard their last
letters—a proof that she was in high favour with their mother. Honor
was not accustomed to sitting with her hands before her, and
promptly found occupation in various ways—she ran messages,
wrote notes and orders, arranged flowers, and ventured on
respectful suggestions with regard to the drawing-room, a fine
apartment, expensively furnished in the worst taste imaginable—a
supreme contrast to Mrs. Langrishe’s room, which was the prettiest
in Shirani. People little suspected how that leisurely lady dusted it
entirely herself, shook out draperies, arranged flowers, and washed
the china ornaments with her own delicate hands. Her room, as she
understood it, made an effective background for herself—and she
spared no pains to frame Ida Langrishe in the most becoming
fashion. The floor was covered with fine old prayer-rugs, the tables
were strewn with curios, the walls hung with valuable water colours,
and scattered at suitable intervals were inviting armchairs.
Ill-natured people assured one another that the Persian rugs,
carvings, and silver bowls were all so many offerings from “men.”
Even so Mrs. Langrishe would have been the first to admit,
“Presents to Granby and myself. Colonel Greene, a dear old thing,
brought us the carpet from Peshawar; and Mr. Goldhoofe sent those
silver things from Delhi. I must say that our friends never forget us.”
Mrs. Langrishe, as we know, had fully determined to hand over the
drawing-room to her niece, it would be such good practice for the
child, and really the flowers took up an hour every morning. She
would find many ways of making Lalla useful. But that young lady
steadily objected to these plans, she immediately made her aunt
aware that she considered herself merely ornamental. “Oh dear no!
she never arranged flowers, she had no taste in that line, and
besides, it would spoil her hands. Dust the drawing-room! dear Aunt
Ida must be joking; why, that was the bearer’s business. Get out the
dessert! oh!” with a peal of ringing laughter, “she was not to be
trusted. She would eat every chocolate, and all the best French
sweets!”
So whilst Mrs. Langrishe laboured, as usual, over her household
tasks, her fair niece, with a locked door, lay upon her bed, reading a
novel, tried new experiments in the hairdressing line, or wrote notes.
No, no; she had not come to Shirani to be a lady-help. She had
always heard that her aunt Ida was very clever; but, luckily, she had
her wits about her also!
During Honor Gordon’s period of enforced retirement, she went
early every morning for a solitary walk along a pretty sandy road,
that wound among the dark aromatic pine woods—a road with sharp
angles, and deep leafy ravines, green with ferns and ivy. It was early
in May, and the ground was strewn with pine-needles, which
deadened the footfall; the firs were thin and bare, and through their
dark branches she caught glimpses of the snows, that like a great
white rampart hung in mid-air, between a brilliant blue sky and an
opal-tinted mist. Honor enjoyed these rambles immensely, though
she rarely met a soul, save a syce exercising a horse, or an ayah
wheeling a perambulator. Her sole companion was “Ben,” who luckily
had “taken to her,” and with whom she had established relations of
such a friendly character, that she had actually been installed in the
unexpected position of his “aunt.”
Occasionally they made joint excursions down the khud, he in
search of the private larders of other dogs, she in quest of ferns and
moss for table decoration. Ben was a personage of such importance
at Rookwood that he demands half a chapter to himself. He was a
dog with fixed opinions, and hated Mrs. Langrishe—and one or two
other people—in the same degree that he hated cold boiled meat.
Sport was his passion, the chewing up of Suède gloves his
weakness. He was a fox-terrier with a history. As a pup, he had been
presented by a man to a girl, on the principle of “love me love my
dog,” but alas, the false maiden had loved neither the one nor the
other; she heartlessly jilted the man, and abandoned the dog to his
fate. However, her ayah (prudent soul) ere she went down the hill,
sold the pup to a bheestie for the sum of two annas (an ancient
debt), he happened to be Mrs. Brande’s servant, and was
excessively vain of his purchase, but left him most of the day tied by
a strip of pink calico to a conspicuous tree in her compound, where
he suffered him to “eat the air,” and but little else. Mrs. Brande, en
route to feed her well-to-do fowls, noticed the famishing animal; and
as she often threw him a crust, he naturally hailed her advent with
extravagant demonstrations of delight and feeble yelps of joy. Her
easily softened heart was touched by the raptures of the starving
puppy, and after some parley she bought him from the bheestie for
the sum he swore he had paid—to wit, ten rupees—in order to feed
him up and get him a good master. But Ben was thoroughly satisfied
with his present quarters, and soon made himself completely at
home. He displayed an easy intimacy with armchairs and cushions,
he had undoubtedly been accustomed to sweet biscuits and to good
society, and his mistress pointed out with just pride that he
understood English perfectly! Of course she eventually adopted
“Ben,” he made himself indispensable, he refused to be separated
from his patroness, and became her shadow, and soon ceased to be
a shadow himself. He grew from a dirty, starving, shivering whelp,
into an extremely handsome dog, with a fine gloss on his coat. Did
he ever remember his own evil days, as he lounged of an afternoon
sunning himself at the gate of Rookwood, and passed in scornful
review, curs less happy and of low degree? Are dogs snobs?
Whether snob or not, Ben was brave, he lowered his tail to none,
and when the big wild cat that created such havoc among the
poultry, went to ground under the messhouse, “Ben Brande,” as he
was called, was the only one of the assembled mob of terriers, who,
as a looker on expressed it, “was man enough to follow him, kill him,
and drag him out.” Ben Brande lost an eye thereby, but gained a
magnificent reputation.
Of course Ben was spoiled. His mistress talked to him incessantly;
he had his own little charpoy in her room, his morning tea in her
company, and now and then he was permitted to invite his pal
“Jacko,” a red terrier, to dine and spend the day! (Once they had
elected to spend it quietly in Mr. Brande’s dressing-room, where they
devoured several pairs of boots, a sponge-bag, and the back of
“Nancy.”) Ben escorted his mistress in her walks and drives. Many a
time she went out solely on his account, and it was an indisputable
fact that he had favourite roads, and his “grandmamma”—as the
infatuated lady called herself—always studied his wishes. On those
occasions when “his grandpapa and grandmamma” were dining
abroad, he never went to bed, but established himself at the
entrance until their return (however late), and passers-by could
always tell that the Brandes were at a “burra khana” when they saw
an upright little white figure sitting by the gatepost. Indeed it was
whispered, that the reason Mrs. Brande was always so early to
depart, was simply that she did not like to keep Ben waiting up! She
never said so, but every one knew that Ben was the real motive for
her premature departure. And this was the animal who now
accompanied Honor, and who had accorded her his patronage and
friendship. One morning, as they were strolling homewards, he with
a large stone in his mouth, and she carrying an armful of ferns, they
nearly came into collision with another couple—the angles were
abrupt—walking noiselessly on pine needles. They proved to be
Toby Joy, who was also attended by a dog, and sauntering along
hand-in-hand with a young lady, a dainty, white-skinned little person,
with fluffy light hair, small keen eyes, admirably arched brows and a
tip-tilted nose.
Honor was by far the most embarrassed of the trio, and blushed a
good healthy blush—of which she was heartily ashamed. Why
should not other people enjoy the delicious morning air? As to
walking hand-in-hand, she ought to be the last person to object; had
she not walked hand-in-hand herself with an absolute stranger?
“Good morning, Miss Gordon,” said Toby, slowly relinquishing Miss
Paske’s fingers, and doffing his cap. “So you have got up here all
right in spite of the buffalo! Let me introduce you to Miss Paske.”
The girls bowed, and looked at one another gravely.
“We are getting up that burlesque I told you about, and have come
out early to study our part together.”
“How praiseworthy of you,” said Honor, in simple good faith. “And
what is the piece to be?”
“The Babes in the Wood,” responded Miss Paske with an odd
smile, and looking Honor over with her bright little eyes. “Don’t you
think it will be suitable to the dear simple people at Shirani?”
“I really don’t know,” replied the other, with a puzzled face.
“Well, I hope you will come to see it,” and with a patronizing nod
she moved on. But Ben and Jumbo (Mrs. Langrishe’s dog) were not
disposed to part thus! The household feud had evidently extended to
them. They had been tiptoeing round one another for some time,
with considerable stiffness in their gait, emitting low and insulting
growls, that now culminated in a sort of gurgling snarl, as they flew at
one another’s throats. Miss Paske gave a little stifled shriek, and
scrambled hastily up the bank, whilst Honor and Toby made
desperate attempts to separate the combatants. They each caught
hold of a dog by whatever came first, leg or tail; but the dogs refused
to be parted, and to and fro, and up and down, they struggled and
scrambled in a mutual frenzy. Meanwhile, Lalla, who was now at a
safe elevation, actually appeared delighted at the performance, and
laughed and clapped her hands ecstatically. At last, by the expedient
of pouring sand on their heads, the dogs were choked off, and each
side was bottle-holder to a furious, panting, struggling animal.
“I think we had better separate at once,” gasped Honor, who only
restrained Ben with the greatest difficulty.
“Yes, the sooner the better,” agreed Toby, who was also wrestling
with an eager armful.
As Honor turned homewards, with Ben hanging longingly over her
shoulder, Miss Paske, who had tripped down from her coign of
’vantage, called after her, in her sweetest, clearest tones—
“Be sure you tell Mrs. Brande, that her dog got the worst of it.”

END OF VOL. I.

PRINTED BY WILLIAM CLOWES AND SONS, LIMITED, LONDON

AND BECCLES.
 Transcriber’s Notes
Punctuation errors/omissions have been fixed.
Page 21: “you have jus” changed to “you have just”
Page 246: “Grandby and myself” changed to “Granby and myself”
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