1- What is the meaning of competition?
2- The disadvantage of competing in price
3- The advantage of competing in quality, service
4- What's the definition of
monopolistic competition?
1- What is the meaning of competition?
- Competition means rivalry between two or more suppliers who are pursuing the same customers. When you sell goods & services in the free market, chances are someone else will be trying to sell the same thing you sell, so you should compete with you rivals for customers. You might choose to compete in prices, quality, or innovation.
2- The disadvantage of competing in prices
- When markets become filled with competitors & products start to look alike, price becomes a company's key competitive weapon. During three years period in the early 1990, price wars caused the U.S airlines industry to loose more money that it had since the Wright brother's first flight. So they have only two alternatives: they may produce goods & services at a lower cost, or they can add unique value to their products so that they can compete on something else such as quality, service, or innovation.
3- The advantage of competing in quality, services and innovations.
- Businesses may decide to compete for customers by offering high- quality goods or better services.
- The business that competes in quality & services may well end up with a total profit that's equal or greater than the profit of a business that competes on price. In according to changing in quality, services of goods and services; businesses try to innovate & creating new features & new services which creates new business opportunities.
4- What's the definition of monopolistic competition?
- most of the competition in free market system economics is monopolistic competition in which many sellers offer products that differ from competing products in at least some small way.
To be continued
June 4, 2010 at 1:53 PM
oooh, i wanna thank you for your articles really it has important information
June 5, 2010 at 11:28 PM
thank you mo`men for your comment