economics of competition

The economics of competition refers to how businesses operate in a market when multiple firms compete to attract customers. Competition encourages innovation, efficiency, and better prices, as companies strive to outperform one another. It helps prevent monopolies by ensuring no single company dominates the market, which benefits consumers with more choices and fair prices. Conversely, too little competition can lead to higher prices and lower quality. Overall, healthy competition drives firms to improve their products and services while balancing market power, fostering a dynamic economy that benefits both businesses and consumers.