I agree with his general analysis, but I would add that the transportation costs that he talks about create local monopoly power for some businesses. Along interstate 5 in the Central Valley of California, the gas stations that face no competition (at the same cloverleaf) clearly charge higher prices, though eventually the local monopoly becomes a local oligopoly as other gas stations move in.
More generally, however, I find railing against monopolies to be useless. Both monopoly and competition are part of the way almost all markets work. If markets weren't dynamic processes, the Robinson-Chamberlain model of monopolistic competition would be the most accurate.
Jim Devine jdevine at popmail.lmu.edu & http://clawww.lmu.edu/Departments/ECON/jdevine.html