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What is competition?
Where different firms are trying to sell a similar product to a consumer
How can firms compete?
-Price -Marketing -Customer Service -Quality
How can firms compete with price?
Firms would lower their prices to meet competition prices/standards
This would increase the demand for their products
This means more profit for the firm and more customers.
How can firms compete with marketing?
Promotes business & increases outreach and attention.
Consumers become aware of their product and more people will buy it.
How can firms compete with quality?
Good quality products will increase the likelyness of consumers buying a good despite whatever the price may be.
Why do producers compete?
-To enter a new market -Survive in a market -Make profit
One adavantage of compettion is higher profits. How can producers obtain this.
By cutting cost of production and/or using efficient technology.
This depends as using technology can be expensive so costs may not fall. Not all producers will cut costs because they make high profits.
One advantage of competition is innovation. How can this help a producer?
This helps firms stay ahead, stand out from competition, increases sales and allows them to supply consumers with new products.
Not all producers will be able to afford this.
One advantage of competition is the sharing of ideas. How can this help a producers?
Helps firms improve their product
Companies may steal your ideas. Some producers aren’t easy to learn from and are secretive.
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