Thus, merchant's capital enters the formation of the general rate of profit
 as a determinant pro rata to its part in the total capital. Hence, if
 we say in the given case that the average rate of profit = 18%, it would = 20%,
 if it were not that 1/10 of the total capital was merchant's capital and the
 general rate of profit thereby lowered by 1/10. This leads to a closer and more
 comprehensive definition of the price of production. By price of production we
 mean, just as before, the price of a commodity = its costs (the value of the
 constant + variable capital contained in it) + the average profit. But this
 average profit is now determined differently. It is determined by the total
 profit produced by the total productive capital; but not as calculated on the
 total productive capital alone, so that if this = 900, as assumed above, and
 the profit = 180, then the average rate of profit = 180/900 = 20%. But, rather,
 as calculated on the total productive + merchant's capital, so that with 900
 productive and 100 merchant's capital, the average rate of profit = 180/1,000 =
 18%. The price of production is, therefore = k (the costs) + 18, instead of k +
 20. The share of the total profit falling to merchant's capital is thus
 included in the average rate of profit. The actual value, or price of
 production, of the total commodity-capital is therefore = k + p + m (where m is
 commercial profit). The price of production, or the price at which the
 industrial capitalist as such sells his commodities, is thus smaller than the
 actual price of production of the commodity; or in terms of all commodities
 taken together, the prices at which the class of industrial capitalists sell
 their commodities are lower than their value. Hence, in the above case, 900
 (costs) + 18% on 900, or 900 + 162= 1,062. It follows, then, that in selling a
 commodity at 118 for which he paid 100 the merchant does, indeed, add 18% to
 the price. But since this commodity, for which he paid 100, is really worth
 118, he does not sell it above its value. We shall henceforth use the term
 price of production in this, its more precise, sense. It is evident, therefore,
 that the profit of the industrial capitalist equals the excess of the price of
 production of the commodity over its cost-price, and that commercial profit, as
 distinct from this industrial profit, equals the excess of the selling price
 over the price of production of the commodity which, for the merchant, is its
 purchase price; but that the actual price of the commodity = its price of
 production + the commercial profit. Just as industrial capital realises only
 such profits as already exist in the value of commodities as surplus-value, so
 merchant's capital realises profits only because the entire surplus-value, or
 profit, has not as yet been fully realised in the price charged for the
 commodities by the industrial capitalist.[1] The merchant's selling price thus exceeds the
 purchase price not because the former exceeds the total value, but because the
 latter is below this value.