o
that upon HH'. In such a case it will be a matter of indifference to
the Trust whether it sells five million tons at a price 100s. per ton,
or seven millions at 90s.

We have seen that the causes which determine expenses at the several
points in A'L' have no relation to the causes which determine the
selling price at the various points, except to furnish a minimum below
which the price cannot fall. Above this limit expenses of production
in no sense help to determine monopoly prices; the true determinants
are entirely in the region of demand, and are measured by the marginal
utility or satisfaction afforded to consumers by the several
quantities which constitute supply at any given time.

Since expenses of production always enter into the determination of
competition-prices, which are fixed by the interaction of expenses and
money estimates of utility--_i.e._, by supply and demand, it is
evident that the curve of monopoly prices has no assignable relation
whatever to the curve of competition prices, and that the most
profitable output and prices of Trust-made goods are in no way
identified with the most profitable output and prices in a
competitive trade. In competition the curve of selling prices tends to
follow closely the curve of expenses, and consequently the areas of
profits and expenses tend to bear the same proportion to each other at
different points of increment in the trade. For if at any point great
increases in economy of production are achieved, while the large
elasticity of demand maintains a price nearly the same as before, the
wide margin of profit which might fix the actual price at that point
for a monopolist only serves to stimulate such increased output on the
part of trade competitors as will continue until the flexibility of
demand weakens, and prices are lowered to such a point as will yield
the normal margin or market rate of profit.

There is, therefore, nothing in common between competition prices and
monopoly prices for different quantities of supply, nor anything to
secure that the actual quantity of supply and the price shall be the
same in the two cases.

Sec. 6. It is, however, conceivable that in a certain commodity where a
genuine monopoly holds the market, the price should be as low as under
free competition. This may be illustrated by the following curves of
expense and price:--

[Illustration]

where the economies of increased production continue to be very great,
whil