Economic Competition
An Economic Competition is a competition in a marketplace.
References
2015
- (Wikipedia, 2015) ⇒ http://en.wikipedia.org/wiki/competition_(economics) Retrieved:2015-6-30.
- In economics, competition is the rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix: price, product, distribution, and promotion. Merriam-Webster defines competition in business as "the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms." [1] It was described by Adam Smith in The Wealth of Nations (1776) and later economists as allocating productive resources to their most highly-valued uses [2] and encouraging efficiency. Smith and other classical economists before Cournot were referring to price and non-price rivalry among producers to sell their goods on best terms by bidding of buyers, not necessarily to a large number of sellers nor to a market in final equilibrium. [3]
Later microeconomic theory distinguished between perfect competition and imperfect competition, concluding that perfect competition is Pareto efficient while imperfect competition is not.Competition, according to the theory, causes commercial firms to develop new products, services and technologies, which would give consumers greater selection and better products. The greater selection typically causes lower prices for the products, compared to what the price would be if there was no competition (monopoly) or little competition (oligopoly).
Competition is generally accepted as a necessary condition for the coordination of disparate individuals interests via the market process.
It is generally accepted that competition results in lower prices and a greater number of goods delivered to more people. Less competition is perceived to result in higher prices with a fewer number of — and less innovation in — goods delivered to fewer people.
- In economics, competition is the rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix: price, product, distribution, and promotion. Merriam-Webster defines competition in business as "the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms." [1] It was described by Adam Smith in The Wealth of Nations (1776) and later economists as allocating productive resources to their most highly-valued uses [2] and encouraging efficiency. Smith and other classical economists before Cournot were referring to price and non-price rivalry among producers to sell their goods on best terms by bidding of buyers, not necessarily to a large number of sellers nor to a market in final equilibrium. [3]
- ↑ Merriam-Webster Online
- ↑ George J. Stigler, 2008. ([1987 2008,. “competition," The New Palgrave Dictionary of Economics. Abstract.
- ↑ Mark Blaug, 2008. “invisible hand," The New Palgrave Dictionary of Economics, 2nd Edition, v. 4, p. 565. Abstract.