What is Competition and Market Structures? Why do we need competition?

Competition and Market Structures are economic theories that analyze the behaviors of firms in different markets.

Competition is the rivalry among sellers to increase their market share, by offering better products, services, or prices.

Market Structures are the different types of markets in which firms operate, such as perfect competition, monopolistic competition, oligopoly, and monopoly.

Competition is essential for an efficient allocation of resources, as it encourages firms to be more efficient and innovative.

It also helps keep prices low, as firms are competing to offer the lowest price possible.

Competition also encourages firms to invest in research and development, in order to stay ahead of the competition.

Without competition, firms may become complacent, leading to lower quality products and services.

Thank you for reading. Create summary videos with Kimavi.