ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -More competition means greater choice and more services Because they can access a wider range of products and services, consumers – and also businesses, as consumers of raw materials – can find the product that best meets their needs.

Detailed explanation-2: -Basic economic theory demonstrates that when firms have to compete for customers, it leads to lower prices, higher quality goods and services, greater variety, and more innovation. [1] Competition is critical not only in product markets, but also in labor markets.

Detailed explanation-3: -Greater competition among sellers results in a lower product market price. If the same popular toy had numerous producers instead of only one, the price would be lower because the producer knows the consumer could get the toy somewhere else. The cycle of competition between sellers never ends.

Detailed explanation-4: -If a business does not face competition, it has little incentive to lower its prices or improve its products. If there is only one seller in the market, it may charge higher prices without fearing a loss of sales to a competitor.