We have now to turn our attention to other variations in competition besides the variation in intensity. We need to distinguish the different species of competition. That competition which is in daily operation in most branches of industry we may call _actual_ competition. That competition which would spring up in any industry in case an increase in profits called it out, we may call _potential_ competition. The third class is instanced in the letting to the highest bidder a franchise for city water or gas-works, or street-car lines. Here competition acts at a single time to fix the price for perhaps twenty years. We may call this, for want of a better name, _franchise_ competition. It possesses the evident advantage that it avoids both the waste of competition and the fluctuation of prices. It has the disadvantage that, unless the owners of the franchise are held strictly to their contract, quality is apt to be sacrificed; also that if the purchase is for a term of years, cheapening in processes may result in undue profits to the franchise holders. The discussion of this matter, however, does not properly belong to this chapter. Arranging in their logical order the laws of competition which we have found, we have the following diagram: In any given industry the tendency toward monopoly increases: (1.) As the waste due to competition increases. The waste of competition increases in proportion to its intensity. (1.) The intensity of competition increases as the number of competing units decreases. (2.) The intensity of competition increases with the amount of capital required for each competing unit. (2.) As the number of competing units decreases. (3.) As the amount of capital required for each competing unit increases. (4.) As the number of available natural agents decreases.