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How would an increase in competition affect economic efficiency?

I realise that it would increase it (e.g. Perfect competition vs Monopoly) however what specific points can be made?

More competition, the more the consumers benefit and buisness have to do there best. Thats why capitalism suceeds.

This entry was posted on Monday, February 15th, 2010 at 11:54 am and is filed under competition. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

4 Responses to “How would an increase in competition affect economic efficiency?”

  1. americanarrayan on February 15th, 2010 at 5:11 pm

    More competition, the more the consumers benefit and buisness have to do there best. Thats why capitalism suceeds.
    References :

  2. If company A’s prices are much cheaper than company B’S it may drive people to buy something they may not have, just because of the deal they are getting.
    References :

  3. hmmm….haven’t taken economics in a while…

    but if competition increases, this will drive prices down while at the same time giving the consumer more of a choice.

    since prices are now lower, consumers will purchase more product. eventually this will stabilize the price.
    References :

  4. double bungalow on February 15th, 2010 at 6:41 pm

    In the energy sector, if there were more competition on the supply side, if everything wasn’t weighted to coal/oil/nuke and if the other players …solar, wind, geothermal, tidal had a shot, it would make for a more efficient and durable model for energy.

    But thinking that way would mean having an energy policy… not just eternal fealty to oil/gas/nuke.
    References :

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