72

ECONOMIC PRINCIPLES

tension of supply, the point making the maximum of profits
will be found. Whether the profits of a monopoly are great
or small depends on the nature of the case. Mere monopoly
does not guarantee profits, and a producer compelled to
exercise a monopoly privilege might find that he could
secure less profits than if he were to transfer his energies and
resources to some competitive line of production. On the
other hand, if the monopoly privilege yield profits greater
than could be secured in a competitive industry, the fact of
monopoly shields the monopolist from the reduction of
profits which the admission of competitors might ensure.
When the profits, either of a monopolist or of a producer
under competition, fall below what equal ability could
secure, with equal risk, in other lines of enterprise, the
difficulty of transferring capital to other employments may
stand in the way of equalisation of profits with those obtainable
 elsewhere. Only if enterprise were able, on the one
hand to enter freely into, and on the other to forsake without
loss or difficulty, any trade, as its profits might attract or
repel, could anything like a uniform rate of profit be supposed
existent, even for equal risks, Competition, where it exists,
loes tend to keep profits in different trades from being
widely different, and to divert enterprise from less to more
profitable lines as the means by which that end is attained.
If there be not in existence such a disposition among buyers
as leads a sufficient section of them to refuse to pay more,
for a commodity, to one dealer than would secure it equally
conveniently from another, there cannot be postulated that
uniformity of price, at one and the same time and place,
for the same goods, which is assumed throughout the preceding
 discussion. In wholesale markets the assumption is
fairly justifiable. It only applies quite partially to retail
dealings.
Attention has already been given to the difficulties
associated with the determination of the cost of production
of joint products. In practice this case is one of very
frequent occurrence, and an extreme case, illustrating a
large and important class of problems, is the problem of the
determination of railway rates. A very large part of the