_Why the Public depends on Competition for Securing its Share of Benefit from Improvements._--Another question is whether the two systems, that of competition, on the one hand, and monopoly, on the other, confer equal benefits on the public by virtue of the improvements they make. Competition does this with the greatest rapidity. As we have seen, it transforms the net profits due to economies into increments of gain for capitalists and laborers throughout all society. The wages of to-day are chiefly the transformed profits of yesterday and of an indefinite series of earlier yesterdays. The man who is now making the profits is increasing his output, supplanting less efficient rivals, and giving consumers the benefit of his newly attained efficiency in the shape of lower prices of goods. In practice rivals take turns in leading the procession; now one has the most economical method, now another, and again another; and the great residual claimant, the public, very shortly gathers all gains into its capacious pouch and keeps them forever. Would a secure monopoly do something like this? Far from it. It would be governed at every step by the rule of maximum net profits for itself. Its output would not be carried beyond the point at which the fall in price begins really to be costly. The lowering of the price enlarges the market for the monopoly's product and up to a certain point increases its net gains. Beyond that point it lessens them. [Illustration] Now, even the interest of the monopoly itself would lead it to give the public some benefit from every economy that it makes. This is because the amount of output that will yield a maximum of profit at a certain cost of production is not the same that will yield the maximum of net profit when the cost is lower. Every fall in cost makes it for the interest of the monopoly to enlarge its output somewhat, but by no means as much as competing producers would enlarge theirs. It will always hold the price well above the level of cost. In the accompanying figure distance along the line _AK_ represents the amount of goods produced, while vertical distance above the line measures costs of production, as well as selling prices, and the descending curve _FJ_ represents the fall of prices which takes place as the output of the goods is increased. Now, when the cost of production stands at the level of the line _CI_, the amount of output that will yield the largest amount of net profit is the amount represented by the length of the line _AM_. That amount of product can be sold at the price represented by the line _MG_. The gross return from the sale will be expressed by the area of the rectangle _AEGM_, and the area _CEGN_, which falls above the line of cost, _CI_, is net profits. They are larger than they would be if the line _MG_ were moved either to the right or to the left, _i.e._, if the amount of production were made either larger or smaller. Now, if the cost of production falls to