100

POLITICAL  ECONOMY

is  that  material  curtailment  of  output  is  less
to  be  apprehended  in  industries  functioning
under  increasing  returns  than  in  those  functioning ­
  under  decreasing  returns,  because
in  the  former  the  smaller  supply  while  it
resulted  in  higher  price  would  result  also  in
the  loss  of  the  economies  previously  reaped
from  producing  on  a  large  scale.  Yet  another
generalisation  may  be  laid  down,  namely,
that  if  monopolisation  is  to  bring  about  a
lower  price  it  is  most  likely  to  do  so  (1)  in
industries  in  which  much  of  the  supply  price
under  competition  is  made  up  of  the  expenses
of  securing  as  customers  for  particular  firms
persons  who,  in  any  event,  would  buy  the
commodity,  and  (2)  in  industries  in  which
monopolisation  lowers  the  cost  of  producing
proper.
We  pass  next  to  the  cases  in  which  discriminative ­
  prices,  or  differential  prices,  as
they  are  sometimes  called,  are  possible.
It  may  be  said  at  once  that  discriminative
charges  cannot  be  imposed  where  competition
is  untrammelled,  because  the  existence  of  these
charges  implies  at  least  some  agreement
among  producers.  Differential  charges  are
of  three  kinds,  namely,  persona],  trade,  and
local.