Economic Theory of Competition

The Economic Theory of Competition suggests that when multiple businesses offer similar products or services, they compete to attract customers. This competition leads to better quality, lower prices, and innovation, as companies strive to meet consumer needs. In a competitive market, no single business can control prices or dominate the market completely, as customers can easily switch to alternatives. Overall, competition benefits consumers by providing choices and encouraging efficiency among producers. This dynamic is essential for a healthy economy, fostering growth and improving standards of living.