What is Competition/meaning/concept
The term competition is used in many areas and with different meanings.
Competition is known for the fact that several people want to achieve the same goal or a prominent position. This same concept is also applied in the business world from the moment that some organizations want to achieve greater participation in the market than the others.
Competition and the free market
In a society of supply and demand, competition allows prices to remain at levels acceptable to the consumer. In this way, if any company sets very high prices for certain products or services, the right thing would be that most of these customers would wait and stop buying to look for other offers with more affordable prices.
In this way, competition plays a controlling role to prevent brutal price inflation.
However, on occasions, some lobbies seek to eliminate this competition to obtain greater benefits, so their members agree similar prices to bring better benefits without having to reduce prices by pressure from their competitors.
To avoid this type of maneuver, defense bodies were created that seek to detect and punish the practice of this type of competition
These competition regulatory bodies also monitor the market so that it works naturally and can later sanction companies that use this system of alteration. Thus, for example, certain practices such as the sale of products below cost price are not allowed , as this forces many companies to close because they cannot fulfill their commitments, leaving more powerful companies free to enter the market completely.
Therefore, these bodies are fundamental for the market to function legally and for consumers not to be victims of large and powerful corporations. Thanks to these bodies, pressure is exerted on these companies and makes the market provide products with higher quality and lower prices, providing benefits to society.
Thus, competition can be considered a tool that benefits progress and well-being in general, something that was revealed over the years in communist society, where the absence of competition started to create poverty and technological backwardness.