2.5.3 The competitive environment Flashcards
1
Q
What is competition?
A
2 or more businesses targeting the same customers
2
Q
What are 4 negatives of competition?
A
- If price main focus, sacrifice quality
- Some businesses will fail
- Businesses grow - chance to consume smaller businesses
- All businesses competing for profit can reduce profit levels for individuals
3
Q
What are 2 positives of competition?
A
- Lower prices for consumers
- Encourages innovation
4
Q
How does the size of a market effect competition?
A
Large markets bring more competition
