THE CLASSIFICATION OF MARKETS The line between effective competition and appreciable monopoly power is not an easy one to draw. Some industries are clearly competitive; some are as clearly monopolized. But there remains a middle area in which markets cannot be described with confidence as either competitive or monopolistic. The situations which obtain here shade imperceptibly from those which are more nearly competitive to those which are more nearly monopolistic. The qualifying adjectives, effective and appreciable, which are used to distinguish among them, are of necessity too vague to admit of great precision in application. The differences which exist within this area thus become a matter of degree rather than of kind.
There are practical difficulties, too, which obstruct any attempt to classify markets according to the criteria of competition and monopoly.
Information on many industries is publicly unavailable. Conspiracy in restraint of trade, since it is in violation of the law, is usually hidden. Large establishments frequently produce a variety of products; they may enjoy a monopoly in one line and face competition in another. Products and producers are interrelated; a commodity that appears to be monopolized may actually be in competition with close substitutes; a firm that appears to face many competitors may be found, upon disclosure of the interrelationships existing within the industry, to possess appreciable monopoly power. Market situations are constantly changing; industries once competitive become less so with the development of trade organization and the enactment of restrictive legislation; industries once monopolized become competitive with the establishment of new units and the innovations made possible by discovery and invention. The best that can be done, in the circumstances, is to analyze the situation that appears to have existed in those industries for which information is available at the time for which such information was obtained.