Let us look more closely at the determinants of a monopoly price. Suppose we are dealing with a Trust owning a large amount of fixed capital, some of it more and some less favourably ordered for production, and having an absolute monopoly in the market for steel rails, cotton bagging, or other manufactured articles. First look at expenses of production. A very small output, though produced by the exclusive use of the very best machinery and labour, would not be produced very cheaply, because the economies attending large-scale production would be sacrificed. Each successive increment in output would involve a decreased expense per unit of production so long as the most favourably situated plant was employed. If the output grew so large that worse material or works fitted with inferior plant, or less favourably placed, were called into requisition, the economies of an increased scale of production would be encroached upon by this lowering of the margin of production. Taking the Trust's capital at a fixed amount, there would necessarily come an increment of output which it would not pay to produce even if sold at the price fetched by the previous increment. The ton of steel or of cotton bagging which would only yield a bare margin of profit, if sold at the price fetched by the last ton, limits the maximum output of the business. Under the pressure of free competition this marginal ton will be actually produced. But though, considered by itself, it yields a margin of profit, it will rarely if ever be produced as part of the actual output of a Trust. The actual output of a Trust, we shall find, will be determined at any point between the first unit of output and this marginal increment. The expenses of production will not increase in any close correspondence with the growth of the output, but will represent the fluctuating resultant of the several economies of production at the several points. [Illustration: CURVE OF PROFIT IN TRUST.] In the figures A and B the perpendicular line _ai_ represents a number of increments of production. The expense of producing a supply of 100 will be measured by the line _bb'_, that of producing 200 by _cc'_, and so on. But never in actual industry will the lines of growing expense be regular in their relation to the increase of production, as would be the case in the figure A; they will always be irregular, as in the figure B. The curve of expense _ai'_ in the figure B will be determined by the resultant of the various forces which make for increasing and diminishing returns for each new increment of the requisites of production required to produce the new portion of output. When the increased scale of production makes some new application of machinery economically possible, or where recourse must be had to some decidedly inferior land for the raw material, a large sudden irregularity may show itself in the curve of expense.