Intro To Business
Degrees of Competition Essay
I originally intended on starting this essay off with the definition of competition, but after searching for it, I found that it's synonyms are much more intriguing. Contest, rivalry, emulation, race, and match are the synonyms listed for competition, which gives the impression that it is not something to take lightly when your main source of income is on the line. With most of the stores today being profit motivated, competition is what drives these companies to fight for consumer acceptance and loyalty. There are four main types of competition that a business may face such as a monopoly, an oligopoly, monopolistic competition and perfect competition(also known as pure competition).
Perfect Competition is when a large group of companies and/or retailers produce services or products that appear to be identical. The most relative example in today's society would be a Farmers' Market. If one seller has a pound of tomatoes going for $6.00 and the rest of the market has them for $5.00, no one is going to pay the extra dollar because they can get them from any of the other sellers for less. The term Equilibrium Point, which is where the supply and the demand meet and determine market price, is a very dominant factor in this type of competition, as for it is the main selling point in this industry. Usually there is no advertising or marketing campaigns involved; it comes down to who offers the product for the lowest price.
Monopolistic Competition is similar to "perfect competition" in the aspect that the products or services offered by sellers happen to be very similar, although they are intended to be perceived as different. This misconception is known as product differentiation, which happens to be the key to success in the monopolistic industry and the types of products that tie into this form of competition are commonly found in retail businesses. One example of monopolistic competition...