World Economic Systems Questions
Competition plays a crucial role in a capitalist economy. It serves as a driving force that encourages businesses to innovate, improve efficiency, and offer better products or services at competitive prices. In a competitive market, businesses strive to attract customers by differentiating themselves from their competitors, leading to a wider variety of choices for consumers. This competition also helps to allocate resources efficiently, as businesses that are unable to meet consumer demands or operate efficiently may be forced out of the market. Overall, competition in a capitalist economy promotes economic growth, productivity, and consumer welfare.