Competing with different sizes
Point-to-point small capacity and large capacity are not purely complementary. They do compete.
In 1960-s, longhaul routes were served by narrowbody quadjets - Boeing 707 and Douglas DC-8. With under 200 seats, except the most stretched DC-8.
In 1970-s, widebodies appeared - Boeing 747, DC-10, Tristar. With in the order of 300-400 seats.
The outcome? Boeing 707 and DC-8 could have served long and thin routes, giving more frequencies and destinations where it was hard to fill Boeing 747.
Instead, the longhaul narrowbodies went out of production. Boeing 757 was somewhat designed to replace them - with large wing, MTOW and range, but still smaller than Boeing 707. And it recently went out of production, too - could not compete with widebodies.
On the other hand, Tristars, DC-10 and even Boeing 747 commonly flew short domestic hops in USA in 1970-s. Boeing 737 and DC-9 were around, but a lot of lines had domestic widebodies.
By now, the domestic routes are dominated by Boeing 737 - offering more frequencies and more direct services. Tristar and DC-10 are out of production, and boeing 747 no longer flies domestic.
So, competition between different sizes can be real...