What is the role of competion in the marketplace?

Question that will be on my economics test please help.

Answer:
To keep the market stabilized.

Without competition you have a Monopoly.

When you have a Monopoly you can make your prices as high as you want and people will pay it, if they want it because there are no alternatives.

Competition helps keep the economy at a balance, and keeps prices fair for the population.

-Tim
Competition is always good for the consumer. You don't want a monopoly that can charge whatever they want like the Utility Companies now do you?
Competition basically determines what the market will pay for goods or services, as well as how saturated a given market is.

Competition also drives new ideas into the marketplace, as competitors strive to find their 'market differentiators'.

Does this help?

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