The _entrepreneur_ is the agent in the case, profits are the lure, and competition--rivalry in buying--is the means; and competition is, as we use terms, absolutely free whenever it is certain that the smallest margin of net profit will set it working and draw labor or capital to the profit-yielding point. There is competition among the _entrepreneurs_ at A''' in selling this finished product to the consuming public, and among different purchasers in buying it. Whenever the price of A''' is so high that the whole output of it cannot be sold, each vender tries to supplant others and insure a sale of his own product rather than that of any one else. Competition here is overt and active. When all can be sold at the current price, finding a market for one vender's supply does not require that he win away another's customers, and although the different sellers continue to be rivals and each would welcome an increase of patronage made at others' cost, no one is forced to underbid others in order to continue to sell his accustomed output. Competition is here quiescent, since actual underbidding and the luring away of rivals' customers do not take place. When _entrepreneurs_ who are not now in the subgroup A''' are ready to enter it and to become rivals of those already there whenever any profit is to be had by such a course, their competition is not actual but potential; and yet it is a real influence and serves to deter producers already in the field from establishing such a price for their product that the possible competitors will become real and active ones. These three influences may conceivably act without obstruction or may be hindered and deprived of much of their power. In actual life they are subjected to hindrances, and whether they shall hereafter insure a certain approximation to the general state which a perfectly free competition would insure or whether the economic condition of the world shall be permitted to drift far from that normal state, depends on the success which governments will have in reducing or removing the hindrances. [2] In this treatise the term _profits_ will be used to designate the net increase which may remain in employers' hands after paying the wages of labor of every kind and interest on all capital used. The term _gross profits_ describes a sum made up of this net profit and interest on the capital.