CHAPTER 14-firms in competitive markets
What is a competitive market?
- A competitive market is a market which is in competition with all other markets selling similar products.
- For example: Local supermarkets,Tesco and Dunnes Stores are in competition with one another as they both sell similar products.
- Features such as quality and cost influence consumers when choosing their products.
- If a market has one supplier then there will be no competition.
- The level of customer service will also affect how competitive a market is.
- When substitutes are seen in a market, this may also cause competition. Example: Brown bread and white bread.
- Buyers and sellers in a competitive market are known as 'Price Takers' as they are forced to accept the price the market chooses to sell its product or service at.