1. U.S. Department of the Interior, Report to the Secretary of the Interior by the Advisory Committee on Energy, Washington, D.C., June 30, 1971, p. 1.

2. Report prepared for the Interdepartmental Energy study by the Energy Study Group under the direction of Ali Bulent Cambel, Energy R&D and National Progress (Washington: Government Printing Office, 1964), p. xxv.

3. Paul J. McNulty, "Economic Theory and the Meaning of Competition," The Quarterly Journal of Economics, November 1968, p. 639.

4. The evolution of thought in the nature of competition can be found in: P.W.S. Andrews, On Competition in Economic Theory (London: MacMillan & Co., 1964), George J. Stigler, "Perfect Competition, Historically Contemplated," Journal of Political Economy, February 1957, and P.J. McNulty, "A Note on the History of Perfect Competition," Journal of Political Economy, August 1967.

5. Carl Kaysen, "The Corporation: How Much Power? What Scope?" or Edward S. Mason, The Corporation in Modern Society (Cambridge: Harvard University Press, 1960), p. 98.

6. In technical terms, competition tends to create a Pareto optimum allocation of resources: A discussion of the conditions necessary for Pareto optimality and the ability of competitive markets to meet these conditions can be found in: T. Scitovsky, Welfare and Competition (Homewood: Richard D. Irwin, 1971) and J. deV. Graff, Theoretical Welfare Economics (Cambridge: University Press, 1967).

While perfect competition creates an efficient allocation of resources, it does not follow that the allocation is also equitable.

7. Kaysen and Turner, op. cit., pp. 32-34 and I.M.D. Little, The Price of Fuel (Oxford 1953), pp. x-xiv; Prof. Scherer notes that, once vertical price distortions are included estimates welfare loss due to monopoly power increases by about 40 percent. See: F.M. Scherer, Industrial Market Structure and Economic Performance (Chicago: Rand McNally and Co., 1970), p. 404.

It is not necessarily true that monopoly price distortions are always undesirable. Consider the case where negative externalities and monopoly power exist in combination. The market power would tend to offset the impact of the externalities on resource allocation. The net effect may be an improvement in allocative efficiency.

8. Scherer, p. 185. For a comprehensive review of the current state of