In a competitive interaction, each species has a negative effect on the other. Take trees, for example. Why are trees tall, and why do they have trunks? The energy that trees convert from sunlight needs to travel all the way down to the roots, and the water from the roots needs to travel all the way up to the leaves, but the trunk is expensive to make and not the most efficient conveyor of nutrients or energy. It certainly seems that a more-efficient arrangement would be to have the leaves close to the water supply instead of many feet off the ground.
The answer is that trees have to fight for light — a key ingredient in their fitness. A tree can survive only if it's tall enough not to be overshadowed by the tree next to it. When you have to grow tall, a stem just won't cut it. You need something a bit more substantive — hence, the trunk. The next thing you know, all the trees have to make trunks; otherwise, they're overshadowed by the trunky trees next to them.
There's a limit to how tall a tree can grow, of course. This limit is determined by the amount of light that hits the forest where that particular tree grows, the amount of rain, and the soil condition and type. These factors limit how much energy a tree can devote to making trunks. Another limiting factor is wind, which may blow a tree down when the tree is too tall.
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