Competition; Monopolies -- United States; Trusts, Industrial
Let us see what we can learn by a study of three typical examples of the
force of competition. Let us take first the business of growing corn.
There are perhaps three million farmers in the United States engaged in
producing corn, and each one of these competes with all the others. Is
this doubted? We have defined competition as a rivalry that tends to
make the sellers offer better goods for a less price. Now at first sight
it may seem that there is no rivalry at all. Neighboring farmers work
together in all harmony; and no man thinks that because his neighbors
have raised a large crop of corn, he is in any way injured. And yet this
_tendency_ to give better goods and lower prices exists and is plainly
felt. Suppose a new and superior variety of corn were introduced, which
buyers preferred. Some farmers would at once begin to raise it, so that
they might be more sure of a market and perhaps of a better price, and
other farmers would be obliged to follow suit to meet the competition.
Again, consider that the supply and demand adjust themselves to each
other through competition. For suppose, at the ruling price, the demand
to be less than the supply; then to increase the demand, the price must
fall; and the cause of the fall in price is simply that the farmers
compete with each other for the market, and lower their prices in order
to secure a sale for their crops. Note, however, that the rivalry in
this case never becomes a personal one. Each farmer recognizes that an
increased supply lessens the price for his goods; but his neighbor's
extra acreage is such a drop in the bucket, that he never thinks of it
as being really a rival of his own crop.
Public-domain text, read in full here on John Shaqi.
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