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Chapter 34: Q. 19. (page 832)

What are the gains from competition?

Short Answer

Expert verified

Stimulation of growth and generation of substantial benefit for the community occurs due to competition..

Step by step solution

01

Step 1. Gain for competition meaning.

For a company to become more competitive, its important to adopt proper marketing strategies, increase quality and quantity of goods, and establish good and loyal customers. Its a scenario in economy where different firms fight among each other to gain customers attention by providing them with similar product of good quality.

02

Step 2. Following are the gains from competition.

a) Fostering innovation.

b) Diversity of supply and attractive prices for consumers and businesses alike.

c) Creates more productivity and better quality of products and services.

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Most popular questions from this chapter

How can governments identify good candidates for infant industry protection? Can you suggest some key characteristics of good candidates? Why are industries like computers not good candidates for infant industry protection?

What is the “race to the bottom” scenario?

How is international trade, taken as a whole, likely to affect the average level of wages?

If trade barriers hurt the average worker in an economy (due to lower wages), why does government create trade barriers?

Show graphically that for any tariff, there is an equivalent quota that would give the same result. What would be the difference, then, between the two types of trade barriers? Hint: It is not something you can see from the graph.
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