A feature favoring the growth of monopoly when such industries are left to private enterprise is the need to produce and supply the commodity or service at a given locality.  While two street railways can compete on neighboring streets, it is physically impossible for two or more to compete on the same street.  Two systems of water-mains or gas-mains can be put down, as sometimes is done, but this is not only a great economic waste, but the tearing up of the streets is an intolerable public nuisance.  This difficulty is less marked in the case of telephones and electric lighting, and some persons still cling to faith in competition to regulate the rates in those industries; but faith in competition between water companies and between gas companies has been given up by nearly all persons now, as it was long since by students of the subject.

Sec. 6. #Economies of large production favoring monopoly#.  A second feature favoring monopoly in such industries is the marked advantage of large production in them.  These industries are usually spoken of as “industries of increasing returns.”  This advantage is enjoyed in some degree by every enterprise, but it is gradually neutralized and limited.  The need to extend an expensive physical plant to every point where customers are to be served, and the very much smaller cost per unit of delivering large amounts of water, gas, electricity, and transportation, on the same street, offers a greater inducement for one competitor to crowd out or buy out the other at a more than liberal price.  Even then, larger net dividends and correspondingly larger capitalization are secured than were before possible to both companies combined.

Sec. 7. #Uniformity of products favoring monopoly#.  A third feature favoring monopoly is uniformity in the quality of the furnished.  It is a general truth that competition is most persistent where there is the greatest range of choice open to the customer, and consequently the most individual treatment required of the enterpriser.  An artist, even a storekeeper, attracts about him a body of patrons who like his product (for the merchant’s manner and method of dealing are a part of the quality of his goods), and who cannot be tempted away by slight differences in price.  Rival companies in the stage of competition are seen to claim superiority for their particular goods and to improve their service in every way possible.  A new telephone company, entering where a monopoly has held the field, works at once a wonderful betterment in rates, courtesy, and service.  But as the product of all competitors attains the highest technical standard possible at the time, the rivalry is reduced to one of price, and it is usually a “fight to the finish.”