Competition (Elementary)

Competition is a fundamental element of economics and business. It is the process of two or more entities vying for the same resources or market share. Competition can be between companies, individuals, or even countries. It is a driving force behind innovation, efficiency, and progress. In a competitive market, businesses must strive to offer the best products and services at the lowest prices in order to attract and retain customers.

History of Competition

Competition has been around since the dawn of civilization. Ancient civilizations competed for resources, land, and power. In the modern era, competition has become a cornerstone of economic theory. Adam Smith, the father of modern economics, wrote extensively about the benefits of competition in his seminal work, The Wealth of Nations. He argued that competition leads to lower prices, better products, and higher wages for workers.

In the 20th century, economists such as Joseph Schumpeter and Milton Friedman further developed the concept of competition. Schumpeter argued that competition leads to innovation and economic growth, while Friedman argued that competition is essential for a free market economy. Today, competition is a key element of economic theory and is used to explain the behavior of businesses and markets.

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Summary

Competition is an essential element of economics and business. It is the process of two or more entities vying for the same resources or market share. Competition has been around since the dawn of civilization and is a key element of economic theory. It leads to lower prices, better products, and higher wages for workers. For more information about competition, visit websites such as Investopedia, The Balance, and the Federal Trade Commission.

See Also

• Monopoly
• Oligopoly
• Perfect Competition
• Imperfect Competition
• Monopolistic Competition
• Price Discrimination
• Game Theory
• Supply and Demand
• Economies of Scale
• Market Structure

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