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Chapter 21: Q. 19 (page 522)

What are the gains from competition?

Short Answer

Expert verified

Cheaper products & more wages for the leading firm would be the gains from the competition.

Step by step solution

01

Step 1. Meaning

Gain from the competition- means, when two firms compete with each other, then what would the profits to leading firm and advantages to consumers of goods & services.

02

Step 2. Gains

-Competition leads to lowering the prices of goods to capture maximum market share which either way rise the prices.

-Business increases their profit with cheaper & better products.

-On balance, the gains outweigh the losses to a nation.

-When the quantity demanded increases then employees would earn more.

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