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In virtue of this principle the loss accruing to a monopolist through a small reduction of price below the point of maximum profit is of a smaller order of magnitude, smaller than the gain thereby accruing to1 the consumers of the monopolised commodity. This proposition is adverted to in this section with all the more propriety in that the «consumers» accommodated by a railway are to a large extent producers, and accordingly their losses and gains through a change of rate are measurable objectively in terms of money.
Subdivision B: «Interdependent Dealing», will occupy us in the following number.
- Oxford, All Souls College.
- Colson, Cours d’Économie Politique, liv. I., p. 220 and liv. VI., p. 50. (Second edition) As to the order of the variation in the monopolist’s profit, compare «Economic Journal», Vol. IX., p. 307.