Which effect does competition have on a market?

Competition prevents a market from functioning fairly by increasing both demand and

supply

Competition drives up the price of products, which benefits producers but hurts

consumers.

Competition hurts a market by flooding it with inferior products that will not satisfy

consumers.

Competition keeps the price of products at or near the level where supply meets

demand.

Question

History

Terrance Mcbride

12 February, 12:05

Which effect does competition have on a market?

Competition prevents a market from functioning fairly by increasing both demand and

supply

Competition drives up the price of products, which benefits producers but hurts

consumers.

Competition hurts a market by flooding it with inferior products that will not satisfy

consumers.

Competition keeps the price of products at or near the level where supply meets

demand.

+4

Answers (1)

Know the Answer?

Bobby Poole · Answer 1

Competition keeps the price of products at or near the level where supply meets demand.

Explanation:

A good competition should fight to keep customers happy, so they should tend to keep the prices of the products without raising them and without expanding the needs of the demand.

The cause of the producer is to keep the customers and keep the supplies in order to keep the business running.

Sometimes it can even happen that competition can make the prices drop in order to attract the customers, but this should be kept in limit because if the prices drop too much it will hurt the income.