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If you were the only one that sold (produced) the product, then you could sell it for whatever you wanted. There would be nothing to compare it to. Therefore, you could get more money out of it than if there was someone else producing the same product. More competition means varied prices.
Melvin Bayer
Wiki User
∙ 11y agoBuyers compete for the same product by raising what they are willing to pay.
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Why is competition important in a free market system?
they can see the different prices and special functions of a particular product. they can also compare those things. competition isn't only good for consumers but also for the people who make the better product.
How is the market price for a product determined?
Market price is determined by competition and self-interest. Self-interest by the shop owner will make him want to raise his prices in order to make more money for himself. The counterreaction to this is competition. When competition moves in the people will almost always choose the cheaper product, so in order to win the owners lower their prices and try to undersell the competition. Monopolies get rid of competition and therefore would only leave self-interest, and the owner would only raise the prices.
Why marginal cost go decrease in initial phase under perfect competition?
Since, in a perfectly competitive market, prices are fought down to Price = Marginal Cost, the only way to make a strict economic profit is to lower marginal cost.
How does competition among producers increase the variety of goods while lowering their prices?
When producers compete with each other, they are fighting for a position to sell to consumers. All the producers must find a way to make people buy their goods, so they will all lower their prices strategically to sell to more consumers. There is good evidence of this at gas stations that are near each other. Because of the competition between gas stations, prices are lowered to satisfy the buyer. Competition between businesses often leads to innovation, which makes for greater efficiency, while creating a variety of types of this one product or service. In the car industry, this is very common. Car dealers fight to sell to certain kinds of people, so they lower their prices to get more deals with their customers. They also bring a larger variety of products or services to please the customer.
What are the effects of increasing interest rates on inflation and consumer prices?
Increasing interest rates make the cost of borrowing funds higher. Due to the higher cost of borrowing the consumer prices typically fall which lowers the rate of inflation. Consumer prices fall because consumers are less likely to use credit to make purchases and when they do a higher percentage of their assets go towards paying interest and in turn lowering their buying power.
Why is competition important in a free market system?
they can see the different prices and special functions of a particular product. they can also compare those things. competition isn't only good for consumers but also for the people who make the better product.
How is the market price for a product determined?
Market price is determined by competition and self-interest. Self-interest by the shop owner will make him want to raise his prices in order to make more money for himself. The counterreaction to this is competition. When competition moves in the people will almost always choose the cheaper product, so in order to win the owners lower their prices and try to undersell the competition. Monopolies get rid of competition and therefore would only leave self-interest, and the owner would only raise the prices.
How do you set prices for food?
some stores will find all other prices for a product, find the middle cost, and make that cost either a little higher or a little lower.
If you add salt to water does it make the freezing temperature higher or lower?
It make the boiling point higher, and the freezing point lower.
How do movie theaters make the distinction between those with higher and lower price elasticities of demand?
The larger cities with the highest populations are the ones that set their movie prices first (New York, Los Angeles, Chicago, etc.). These are called "First Tier" cities. The rest of the countries base their prices on what the larger cities are charging, what the population is in their area, how much the competition charges, and what amenities a specific theater has.
What is the value of a harrington richardson model 686 22-22mag?
The condition of gun, the condition of box it came in, make the value higher or lower,Longer barrel guns ,such as 12'' buntline, bring higher prices. $150. to $550. shorter barrel guns the lower price
If you add salt to water does it make freezing temperature higher or lower?
lower
What is one sacrifice that boycotters often have to make?
They pay higher prices.
One of the things that works to make sure consumers keep getting better products at better prices is?
competition
Does adding water to a base make the pH higher or lower?
The pH become lower.
On a guitar will turning the tuning machine toward you lower the sound of the string or make it higher?
Lower.
Why marginal cost go decrease in initial phase under perfect competition?
Since, in a perfectly competitive market, prices are fought down to Price = Marginal Cost, the only way to make a strict economic profit is to lower marginal cost.
