Competition is regulating force in the marketplace. if the number of companies producing an item increases, the price of the item will be lower than before, and more people will buy the item because it's cheaper.
What effect does the competition have on the marketplace?
According to basic economic theory, when firms compete for customers, it leads to lower prices, higher quality goods and services, greater variety, and more innovation.
What effect do competitors have on pricing?
Higher seller competition leads to a lower product market price. If a popular toy had multiple producers rather than just one, the price would be lower because the producer knows the consumer can get the toy elsewhere. The cycle of seller competition never ends.
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