What are the benefits of competition in markets ?

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There are a number of benefits that come from competition in markets.  They include:

  • Consumers get the widest possible variety of goods.  If there is some sort of good that consumers might want, someone will try to provide it.
  • Consumers get the best possible quality of goods.  When there is competition, firms will try to outdo one another so they can sell more of their product.  They have to constantly try to improve their products to get more sales.
  • Consumers get the lowest possible prices.  As with quality, firms will compete on price.  They will try to reduce their costs so they can reduce their prices and get more sales.
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