write a 2-page paper describing the importance of competition in markets. How does a lack of competition affect prices and output? Describe what the role of government is in markets vis–vis firms in the market.
Requirements: 2 pages
Answer preview
they may offer subsidies to other firms to compete with big firms and increase production. Alternatively, through taxation, the government may dictate how firms operate in an incredibly competitive market.
Competition in businesses is crucial to spark innovation, better quality, and prices and generally promote production and economic growth. Companies engage in competition to gain more significant market share and enhance profitability. The government may employ several strategies to improve the markets’ competition in line with its strategic objectives for the economy. It can often play a crucial role in stimulating markets by setting up market mechanisms.
