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What is Competition
Competition is a term that refers to the process of confrontation between different economic interests of more market players on various types of markets.

Competition is a term that refers to the process of confrontation between different economic interests of more market players (households, firms, state) on various types of markets (product market - goods and services, market of production factors - land, labor and capital).

The player already operating in the market or just entering the market want to realize their economic interests at the expense of other economic players.

The competition occurs in the following cases:

  • Competition on the supply side - each player forming the supply wants to sell as most expensive, even at the expense of others
  • Competition on the demand side - each player forming the demand wants to buy as cheap as possible, even at the expense of others
  • Competition between supply and demand - competition across the market - players forming the suppy want to sell as most expensive, players forming demand want to buys as cheap as possible

Competition (competitive environment) is one of the prerequisites for the functioning market economy.

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Last update: 18.05.2016

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