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How does the competition among consumers affect profits for the selling firms?
Wiki User
∙ 12y ago
In theory, perfect competition means that consumers can buy identical goods or services from different sources. Buyers have a natural tendency to buy things that are perceived as less expensive. As the price for one source drops, the entire customer base will quickly flee to the cheaper price until the supplier is no longer able to service the increased demand. In the mean time, the other suppliers will have dropped their prices to reacquire market share, or will leave the market if they can no longer compete at the established price. This creates a de facto monopoly in the last remaining supplier, who can then raise prices dramatically, even though the increased volume may have actually reduced the unit costs through various scales of economy. The total profit increase can be dramatic and may quickly stimulate regulatory concerns.
Wiki User
∙ 12y ago
Wiki User
∙ 11y agoCompetition affects consumers because you are aware of advertisement and businesses work very hard towards selling their product. Advertisement and such triggers their attention which leads them to choose one store rather than the other.
Consumers are forced to look at quality, price etc within different companies.
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How does competition affect producers and consumers?
i can't answer this lol
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taxes
Which best explains how a free market system has a circular flow of influences?
Consumers decisions affect producers, and producer decisions affect consumers.
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competition affects price quality and quantity in grocery store
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How does competition affect producers and consumers?
i can't answer this lol
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Deregulation is the cutting back of federal regulation of industry and it affected certain industries in the 1980s by increasing the competition and lowered prices for consumers.
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Government actions that affect business profits are called?
taxes
Which best explains how a free market system has a circular flow of influences?
Consumers decisions affect producers, and producer decisions affect consumers.
What is competition and how does it affect the market?
competition affects price quality and quantity in grocery store
