The importance of competition in markets.
ECN206 The Importance of Competition
write a 2-page paper describing the importance of competition in markets. How does a lack of competition affect prices and output? Describe what the role of government is in markets vis–vis firms in the market.
Requirements: 2 pages
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Competition refers to the rivalry between the firms producing similar commodities or offering services to achieve high ROIs and capture more outstanding market share. Competition is quite beneficial to all stakeholders, such as the firms and especially the consumers. For instance, it offers a broader range of choices, stimulates innovation, and promotes better prices and commodities. Competition in markets is affected by barriers to entry, production factors, and government policies. The government plays a crucial role in controlling competition in markets through controls such as subsidies and taxes, among others.