Every one has a vague idea of the effects of competition. Theory should have attempted to render this idea more precise; and yet, for lack of regarding the question from the proper point of view, and for want of recourse to symbols (of which the use in this connection becomes indispensable), economic writers have not in the least improved on popular notions in this respect. These notions have remained as ill-defined and ill-applied in their works, as in popular language.

To make the abstract idea of monopoly comprehensible, we imagined one spring and one proprietor. Let us now imagine two proprietors and two springs of which the qualities are identical, and which, on account of their similar positions, supply the same market in competition. In this case the price is necessarily the same for each proprietor. If p is this price, D = F(p) the total sales, D1 the sales from the spring (1) and D2 the sales from the spring (2), then D1 + D2 = D. If, to begin with, we neglect the cost of production, the respective incomes of the proprietors will be pD1 and pD2; and each of them independently will seek to make this income as large as possible.