As we've been saying, competition really does lower prices

This is one of those little stories which should really be read the other way around:

Families in the countryside are having to pay almost £3,000 a year more for essentials such as groceries and petrol than those in towns and cities, a study has revealed.


It's one of those cod surveys designed to get the name of the sponsoring firm into the papers but still, consider the point being made. Retail things cost more out in the countryside than they do in the cities.

We know very well that rents are higher in the cities, also that turnover of any one shop is likely to be lower out in the boonies. But as we say, this story should really be read the other way around, not that the country is more expensive, but that the cities are cheaper.

The cause being of course that the cities have many more retail outlets. All competing with each other for our custom. The end result being that prices fall as price is one of those ways - most certainly not the only one - in which people compete for that custom.

That is, we've here proof perfect that competition reduces prices to consumers. By squashing the amount producers can lift from our wallets.

True, this isn't a particularly grand finding, it's one page two or three of every economics textbook already. But it is still worth pointing out. Most especially to those who insist that national monopolies are the way things ought to be done. Say, on the trains, the health care sector, some even arguing for it for housing. Even if we're paying through taxes not directly, competition still reduces the amount that can be lifted from our wallets by the producers.