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Chapter 18: Problem 657

What are the two essential features of competition?

Short Answer

Expert verified
The two essential features of competition are limited resources and rivalry. Limited resources create a competitive struggle for entities to secure their share, while rivalry drives them to constantly strive to outperform each other to achieve their goals. These aspects contribute to the competitive dynamics observed in various biological, economic, and social systems.

Step by step solution

01

Understanding competition

Competition is a fundamental aspect of any biological, economic, or social system. It occurs when two or more entities vie for a limited resource or some advantage, such as food, territory, mates, customers or market share. Now, let's identify its two essential features.
02

Identifying essential feature 1 - Limited resources

The first essential feature of competition is limited resources. When the availability of a resource, such as food, territory or customers, is limited, it creates a situation where each entity must compete with others for access to or control over that resource. Only a certain number of entities can obtain the resource, leading to a competitive struggle to secure their share.
03

Identifying essential feature 2 - Rivalry

The second essential feature of competition is rivalry. The entities competing for limited resources are constantly striving to outperform each other to achieve their goals. This can involve various strategies and tactics to gain an advantage over one's competitors. The rivalry can be constructive, pushing each competitor to perform at their best, or destructive, when it harms all competitors and potentially the resource they are competing for. In conclusion, the two essential features of competition are limited resources and rivalry. Both these aspects contribute to the competitive dynamics we observe in various biological, economic, and social systems.

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Most popular questions from this chapter

What is meant atomistic competition?

Suppose an economy possesses presently 60 million automobiles; and that each automobile must be replaced every 5 years. Suppose also that the present population of 240 million people grows \(2 \%\) per year. Calculate on the basis of these data, all other things remaining equal, the expected demand for automobiles for this year.

State one important reason why Smith's principle of the "invisible hand" does not assure the "perfect functioning," without government intervention, of the U.S. economy today.

Adam Smith's 'invisible hand' operates in the free market system, with active competition, that aligns the self-interests of individuals with the "public interest". What exactly is the "public interest"?

When summing individual supply curves to get the market supply curve, why does the economist add the curves "horizontally" rather than "vertically."
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