What increases competition in a market?

As an online shopper, I see competition affecting prices and choices big time. The number of sellers is key: more sellers usually mean better deals.

Think about it:

Many sellers of similar stuff (like, tons of phone cases)? High competition! That means lower prices and more variety for me to choose from. I can easily compare and find the best option.
Few sellers of a specific item (like a rare collectible)? Low competition. Expect higher prices and fewer options. I might have to settle for what’s available.
Only ONE seller? (Like a software with no real alternatives)? That’s a monopoly! They can pretty much set the price however they want, and I have little choice but to pay it or go without.

Beyond just the number of sellers, other factors also ramp up the competition. For example:

Ease of entry for new sellers: If it’s easy for new online stores to open shop, more competition is likely.
Product differentiation: Even with many sellers, if products are very similar (undifferentiated), competition is based primarily on price. If products offer unique features, competition gets more complex, focusing on branding and features, not just price.

How can you make a market more competitive?

Boosting market competitiveness requires a multi-pronged approach. One key strategy involves fostering a more open and accessible market. This can be achieved through:

Reduced Trade Barriers: Free trade agreements significantly impact market dynamics. Lowering import tariffs and quotas directly increases competition. This forces domestic businesses to innovate, improve efficiency, and offer better value propositions to survive against international players. A/B testing different tariff levels in pilot programs can provide valuable data on optimal levels that balance economic growth with the needs of domestic industries.
Open Capital Markets: Allowing foreign direct investment (FDI) is crucial. Inflows of FDI introduce new players, technologies, and business models, challenging the status quo and stimulating innovation within the existing market. Comparative studies analyzing the impact of FDI on specific sectors can be particularly insightful, informing policy decisions and investment strategies. For example, analyzing consumer response to products introduced by foreign investors through focus groups and surveys can shed light on the impact of increased competition.

Beyond these broad strokes, a deeper dive into specific market segments reveals additional levers for increased competitiveness:

Encouraging Entrepreneurship: Streamlining regulations and providing access to funding for startups fosters innovation and increases the number of market participants. A/B testing different regulatory frameworks can determine the optimal balance between protecting consumers and fostering entrepreneurial activity.
Promoting Transparency and Information Dissemination: Easy access to market data empowers consumers to make informed choices and holds businesses accountable. This includes initiatives such as clear labeling, accessible pricing information, and robust consumer protection laws. A/B testing different levels of information disclosure can help assess the effectiveness of transparency measures in driving consumer behavior and fostering competition.
Investing in Infrastructure: Reliable infrastructure, including transportation, communication, and energy networks, is essential for efficient market operations and reduces barriers to entry for new businesses. Cost-benefit analyses comparing different infrastructure investment options can identify the most impactful strategies for enhancing market competitiveness.

Data-driven approaches are critical. Rigorous market research, including consumer surveys, competitive analysis, and A/B testing of policy interventions, provides crucial insights for fine-tuning strategies and maximizing impact.

How do entrepreneurs increase competition in the market?

Entrepreneurs disrupt markets by introducing novel offerings. This isn’t simply about adding another player; it’s about fundamentally altering the competitive landscape. New entrants often leverage innovative business models, technologies, or approaches to customer service that established firms struggle to match immediately. This forces incumbents to adapt, often resulting in a win-win scenario for consumers.

Consider these key strategies entrepreneurs employ to increase competition:

Niche Domination: Focusing on underserved markets allows new businesses to build strong customer loyalty and brand recognition before facing intense competition from larger players. This often involves deep market research and understanding unmet needs, a critical aspect frequently overlooked.
Blue Ocean Strategy: Creating entirely new market spaces eliminates direct competition initially. This requires significant creativity and a willingness to take calculated risks. Thorough market testing, including A/B testing of different marketing materials and product features, is crucial to validate the strategy’s viability.
Superior Customer Experience: Even with similar products, exceptional customer service can be a powerful differentiator. This could involve personalized interactions, streamlined processes, or innovative customer support technologies. Measuring customer satisfaction through surveys and feedback mechanisms is essential for continuous improvement.
Disruptive Technologies: Introducing groundbreaking technologies can render existing products or services obsolete, forcing established players to catch up or risk obsolescence. Early adoption and iterative development based on user feedback are vital here. Beta testing and minimum viable product (MVP) launches are frequently employed.

The impact of increased competition is multifaceted:

Lower Prices: Businesses often reduce prices to attract customers, benefiting consumers directly.
Improved Quality: Competition drives businesses to improve their product or service quality to stand out from rivals. Quality assurance and rigorous testing protocols become paramount.
Increased Innovation: The need to differentiate leads to constant innovation and development of new features, functionalities and solutions.

Ultimately, entrepreneurs who successfully increase competition fuel market dynamism, fostering economic growth and providing consumers with more choices and better value.

How to increase competitiveness?

Boosting competitiveness isn’t about louder marketing; it’s about deeper understanding. It begins with intimately knowing your customer’s needs and pain points – exceeding competitor solutions in addressing them.

This requires a multi-pronged approach:

Rigorous Customer Research: Don’t rely on assumptions. Conduct thorough user research – interviews, surveys, usability testing, focus groups – to uncover unmet needs and frustrations. A/B testing different product features and marketing messages is crucial for data-driven decision-making.
Product-Market Fit Validation: Continuously validate your product or service aligns with actual customer needs. Track key metrics like customer acquisition cost (CAC), customer lifetime value (CLTV), and churn rate to measure effectiveness. Iterate based on data, not guesswork.
Competitive Analysis Beyond the Surface: Analyze competitors’ strengths and weaknesses, but go beyond feature comparisons. Understand their marketing strategies, customer reviews, and overall market positioning. Identify opportunities to differentiate meaningfully.
Innovation and Differentiation: True competitiveness comes from offering something unique and valuable. This could involve superior functionality, exceptional customer service, a more convenient user experience, or a strong brand identity that resonates with your target audience. Explore unexplored functionalities and customer segments.

Effective execution hinges on:

Prioritizing Customer Feedback: Actively solicit and analyze customer feedback through various channels. Use this data to inform product development and improvement.
Agile Development & Iteration: Embrace an iterative development process, releasing updates and improvements frequently based on customer feedback and market trends. This allows for quick adaptation and competitive advantage.
Exceptional Customer Service: Provide prompt, helpful, and personalized support to build customer loyalty and advocacy. Address negative feedback proactively and transparently.

Ultimately, increasing competitiveness is a continuous process of learning, adapting, and exceeding customer expectations.

How can a market be competitive?

A truly competitive market, the holy grail of economics, hinges on several key factors. Think of it like a bustling farmers’ market, not a corporate behemoth.

Many Buyers and Sellers: The more participants, the less individual power anyone wields. A single buyer or seller can’t dictate prices; they’re price-takers, not price-makers. Imagine trying to haggle the price of apples when there are a hundred other apple sellers down the road!

No Barriers to Entry: Anyone with a decent product should be able to jump in. This fosters innovation and keeps prices down. High start-up costs, restrictive regulations, or complex licensing processes stifle competition. Think of the difference between starting a lemonade stand versus launching a new airline.

Homogeneous Products: This means the goods or services are essentially identical. Buyers choose based solely on price. A perfectly competitive market sells apples that are all basically the same – one farmer’s apple isn’t noticeably better than another’s.

Perfect Information: Buyers and sellers have complete and equal knowledge of prices and quality. Transparency is paramount. No hidden fees, no misleading ads; everyone’s on the same page. This is the idealized scenario, rarely seen in reality.

Real-World Implications: While perfect competition is a theoretical ideal, understanding its components helps us analyze market structures and identify potential inefficiencies. Monopolies, oligopolies, and monopolistic competition deviate from this ideal by exhibiting characteristics like high barriers to entry, few sellers, or differentiated products.
Government’s Role: Antitrust laws and regulations aim to prevent monopolies and promote competition, ensuring consumers benefit from lower prices and greater choice. They act as referees, ensuring fair play in the market “game”.
Examples (Approximations): While true perfect competition is rare, some markets come closer than others. Agricultural commodities, like wheat or corn, often exhibit many of the characteristics of a competitive market, although even then, factors like weather and government subsidies introduce complexities.
Beyond Price: Even in competitive markets, non-price competition can exist (e.g., brand loyalty, customer service). However, these are secondary to the primary driver: price.

What are the four competitive strategies?

Companies battling for market dominance utilize four core competitive strategies. Understanding these is key to deciphering a company’s approach and predicting its future moves.

Cost Leadership Strategy: This involves becoming the lowest-cost producer in the industry. Think Walmart – their vast scale and efficient supply chain allow them to offer consistently low prices. This strategy demands operational excellence and a relentless focus on minimizing costs across the board, sometimes sacrificing certain features or levels of service. However, it can yield massive market share and significant profits if executed correctly. Success relies on economies of scale, technological advancements, and efficient resource management.
Differentiation Leadership Strategy: This strategy focuses on creating a product or service that is perceived as unique and superior in the market. Consider Apple – they’re known for their premium design, user experience, and brand image, justifying higher prices. This approach requires substantial investment in research and development, marketing, and building a strong brand identity. The key is to offer something genuinely different that customers are willing to pay a premium for. Successful differentiation hinges on innovation and strong marketing.
Cost Focus Strategy: This is a niche strategy concentrating on a specific segment of the market and becoming the low-cost provider within that segment. A budget airline focusing on a particular region is a good example. It leverages economies of scale within a defined target market, offering competitive pricing and attracting price-sensitive customers. However, it leaves the company vulnerable to broader market shifts or competition outside its niche.
Differentiation Focus Strategy: This strategy combines differentiation and focus, aiming to offer a unique and superior product or service within a specific niche. A luxury car brand specializing in electric vehicles falls into this category. This allows for commanding higher prices within a specific customer segment, but it’s crucial to thoroughly understand and cater to the needs and desires of this target group. This strategy is reliant on both innovation and a deep understanding of customer preferences in a niche market.

Note: It’s important to remember that these strategies are not mutually exclusive. Companies may employ elements of several strategies simultaneously.

How do governments promote competition in the marketplace?

Governments foster marketplace competition primarily through robust antitrust enforcement. Agencies like the Federal Trade Commission (FTC) play a crucial role, preventing monopolies and promoting fair competition. This isn’t just about theoretical market efficiency; it directly impacts consumer experience. Strong antitrust laws translate to lower prices, greater product variety, and ultimately, more innovative goods and services. The FTC’s investigation into anti-competitive practices, including price-fixing, bid-rigging, and mergers that stifle competition, is vital. Their actions ensure businesses compete on merit, not through manipulation or exclusionary tactics. This constant monitoring and enforcement are critical for a dynamic marketplace where innovation thrives and consumers benefit from a wider selection and better value. Furthermore, government investment in infrastructure, education, and regulatory frameworks aimed at reducing barriers to entry for new businesses also plays a significant role in ensuring a healthy competitive landscape.

What makes a market competitive?

OMG, a competitive market? That’s like the ultimate shopping paradise! Think tons of stores, all selling basically the same thing – like, a million places selling the exact same pair of trendy boots. No single store can jack up the prices because, hello, there’s a gazillion other places to buy them!

It’s all about choice, baby! No sneaky barriers to entry mean new stores can pop up all the time, bringing even *more* options. This crazy competition keeps prices low – score! And because everything is pretty much the same, I can easily compare prices and snag the best deal.

Basically, it’s a shopper’s dream. Loads of buyers and sellers ensures a huge selection and keeps those prices rock bottom. No one store is powerful enough to control the market, so I win!

It’s all about that homogeneous product. That means the jeans from store A are practically identical to the jeans from store Z. Makes comparison shopping a breeze!

How to promote competition in an economy?

A vibrant tech market thrives on competition. Just like a powerful processor needs efficient cooling, a healthy economy needs competitive forces. Competition authorities ensure this by cracking down on anti-competitive practices like monopolies and price fixing – think of it as the system’s built-in antivirus for fair play. This stops companies from stifling innovation by controlling the market.

Enforcing competition law is akin to updating your operating system with security patches; it prevents vulnerabilities from being exploited. This leads to better products and lower prices for consumers – the equivalent of a free software update with crucial performance improvements. For example, imagine if only one company made smartphones; innovation would stagnate, and prices would likely skyrocket.

Furthermore, advocating for pro-competitive regulations is like optimizing your system’s settings for peak performance. This involves pushing for policies that encourage market entry for new players and prevent established giants from using unfair tactics to suppress smaller competitors. This constant push for better regulation leads to a broader range of gadgets and services to choose from, ultimately giving the consumer more power.

In essence, a competitive tech market translates directly to better products, lower prices, more choices, and faster innovation – ultimately benefiting everyone. It’s a constant race to the top, fueled by competition and enforced by regulatory oversight. The results? A more dynamic and exciting tech landscape.

What is increasing competition in business?

The business landscape is a battlefield, and increasing competition is the ever-present threat of rivals vying for market share. This isn’t just about established players offering similar products; it’s a dynamic struggle encompassing several key aspects.

New entrants bring fresh perspectives and technologies, potentially disrupting established norms. Think of the impact of smartphones on traditional cameras or streaming services on cable television. These disruptors often leverage innovative business models or technological breakthroughs to gain a foothold.

Existing competitors constantly refine their offerings, improve efficiency, and aggressively pursue market share. This can manifest as price wars, enhanced product features, or improved customer service, forcing established businesses to adapt or risk becoming obsolete.

Substitute products or services offer comparable solutions, presenting an alternative to existing offerings. For example, video conferencing platforms now compete directly with business travel, forcing companies to reassess their spending priorities.

Disruptive competition is perhaps the most significant threat. These players don’t merely improve existing products; they create entirely new categories. Consider the impact of ride-sharing services on the taxi industry or e-commerce on brick-and-mortar retail. Their success often hinges on leveraging technology and addressing unmet consumer needs in innovative ways.

Understanding these different facets of increasing competition is crucial for businesses to develop effective strategies for growth and survival. Ignoring the threat of new entrants, existing rivals, substitutes, or disruptive technologies is a recipe for failure in today’s rapidly evolving market.

How do you gain a competitive advantage in the market?

Gaining a competitive edge hinges on offering something uniquely valuable and difficult for rivals to replicate. This isn’t just about a lower price; it’s about creating a sustainable competitive advantage. Think deeply about your value proposition: what problem do you solve better than anyone else?

One key area is human capital. Highly skilled, motivated staff, especially those with strong customer relationships, are invaluable. Their expertise and positive interactions create a loyalty that competitors struggle to match. This intangible asset is a potent differentiator.

Another crucial element is intellectual property (IP). Patents, trademarks, copyrights, and trade secrets – these protect your innovations and unique processes, forming a significant barrier to entry for competitors. Consider how you can leverage your IP to solidify your position.

Beyond these, examine your operational efficiency. Streamlined processes, superior supply chain management, and strategic partnerships can all contribute to a cost advantage or speed to market that competitors can’t easily overcome. Brand reputation, built on consistent quality and positive customer experiences, also plays a crucial role in establishing a lasting competitive edge. Don’t overlook the power of strong marketing and branding in communicating your unique value to your target audience.

Ultimately, a sustainable competitive advantage requires a multifaceted strategy that combines tangible and intangible assets, focusing on what truly makes your offering distinct and desirable.

What are 5 examples of perfectly competitive markets?

Finding *truly* perfect competition is like finding a unicorn, but some markets get pretty darn close! Agricultural markets are a good starting point – think endless rows of practically identical apples, oranges, or corn. The price is pretty much set by the overall supply and demand, and individual farmers have little say in it. It’s a shopper’s paradise for bulk buying!

Then there are fish markets. Tons of similar fish, lots of sellers, and the price fluctuates based on the daily catch. You might need to be early to grab the best deals, and knowing the right fishmonger can make a big difference!

Stock and foreign exchange markets are fascinating. Thousands of buyers and sellers trading almost identical assets (like shares of a company), pushing prices up and down constantly. It’s a thrill to be part of that action! Perfect competition? Almost, but insiders and major players can still influence the market significantly. Still a chance to find great deals if you’re quick!

Online marketplaces like eBay and Etsy offer a plethora of choices. While individual sellers have some control over pricing and product differentiation, the sheer number of sellers and the ease of comparing prices makes it a remarkably competitive environment. Finding that rare vintage item or a steal on a slightly used one is always an exciting hunt.

Lastly, those cute little roadside flower stalls! It’s a tiny version of perfect competition, mostly depending on location and local demand. Great for finding unique bunches of flowers without breaking the bank.

What is increased competition in business?

Increased competition in the tech gadget market means more companies vying for your attention and dollars. This isn’t just about established players releasing updated versions of their phones or laptops; it’s a much broader landscape. Think disruptive innovation – a new smartwatch that integrates seamlessly with your smart home, or a pair of earbuds with unparalleled sound quality at a fraction of the price of the competition. This influx of new players and innovative products forces existing companies to constantly improve their offerings, leading to better technology, more features, and often, lower prices for consumers.

This competitive pressure also extends beyond the product itself. Companies are battling for market share through aggressive marketing campaigns, improved customer service, and extended warranties. The fight for app integrations and ecosystem dominance further fuels this competition, with companies striving to lock in users through interconnected services and platforms. For the consumer, this translates into a greater variety of choices and often a quicker pace of technological advancement.

Consider the smartphone market: initially dominated by a few players, it’s now a highly fragmented landscape with numerous brands competing on price, features, and operating systems. This competitive pressure has resulted in stunning advancements in processing power, camera technology, and battery life, all while driving down prices. This same principle applies across all gadget categories, from smart speakers and headphones to fitness trackers and smart home devices.

Analyzing this competitive landscape is key to making informed purchasing decisions. By understanding the competitive pressures at play, consumers can identify companies that are innovating and pushing boundaries versus those simply following trends. This awareness can lead to better value for money and a more satisfying tech experience.

What are the three 3 strategies for competitive advantage?

As an online shopper, I see three main ways companies win: cost leadership (think super-fast, free shipping; huge sales; or consistently low prices like Walmart), differentiation (offering unique products, exclusive brands, superior customer service, or personalized recommendations like Amazon), and focus (specializing in a niche market like Etsy for handcrafted goods, or a specific demographic, allowing them to dominate that area and charge a premium).

Cost leadership means getting the best deals, often through efficiency and scale. Think bulk buying, automated warehouses, and streamlined logistics. This translates directly into lower prices for you.

Differentiation is all about making your products or services stand out. This might involve superior quality, innovative features, a strong brand reputation, or exceptional customer support – things that justify a slightly higher price. For the shopper, this means better quality, unique finds, or a more pleasant shopping experience.

Focus is a powerful strategy. Companies choosing focus concentrate their efforts on a specific customer segment or a narrow product line, allowing them to develop deep expertise and cater perfectly to that target audience. As a shopper, this means finding highly specialized products or services not readily available elsewhere.

What are the 4 pillars of competitive advantage?

The four pillars supporting any competitive business are price, location, product, and service. While each contributes individually to success, the real competitive edge arises from the synergistic interplay of these elements. A low price point might attract customers, but without a convenient location or a quality product, it’s a fleeting advantage. Similarly, a premium product in a prime location will falter if service is lacking. Think of businesses you admire—their success is rarely due to one pillar alone, but rather a carefully balanced combination.

Consider the fast-casual restaurant sector. Chipotle, for instance, excels by offering customizable, high-quality ingredients (product) at a competitive price point (price) in accessible locations (location) with consistently fast and friendly service (service). This multi-pronged approach is key to its sustained success. Conversely, a struggling restaurant might have a fantastic menu but suffer from poor service or inconvenient location, highlighting the interconnected nature of these four pillars.

Analyzing these pillars requires careful self-assessment. For instance, a small boutique might focus on a unique product offering (product) and exceptional customer service (service) to offset a less central location (location) and potentially higher price point (price). The key is understanding your target market and designing a strategic balance that caters to their needs and preferences. This is not a one-size-fits-all formula; the magic lies in tailoring the combination to your unique business proposition.

How do you win a market competition?

Winning market competition requires a multifaceted approach rooted in deep customer understanding and continuous innovation. Know your customers intimately. The 80% statistic highlighting companies lacking effective customer data is alarming; it’s crucial to go beyond demographics. Employ robust data analytics, conduct in-depth user research (including A/B testing and usability studies on your product), and actively solicit feedback. This informs every aspect, from product development to marketing messaging.

Understand your competition, but don’t just copy. Analyze their strengths, weaknesses, pricing strategies, and marketing channels. However, differentiation is key. Reverse-engineer their successful strategies to uncover underlying principles, then leverage your unique strengths to create a superior offering. Highlighting your difference requires a deep understanding of your product’s unique value proposition—what truly sets it apart and solves a specific customer pain point better than the competition.

Crystal-clear messaging is paramount. Avoid jargon. Craft concise and compelling messages that resonate with your target audience, clearly articulating the benefits of your product and aligning with their needs and desires. Test various messaging options through A/B testing of ads and landing pages. This iterative process optimizes for maximum impact.

Strategic partnerships can amplify your reach and resources. Identify complementary businesses or influencers that can expand your market access. A well-structured partnership leverages synergies and reduces individual marketing burdens.

Continuous innovation is non-negotiable. Market dynamics shift constantly. Embrace agile methodologies and prioritize iterative product development. Regularly gather user feedback to inform product improvements and ensure you are consistently meeting (and exceeding) customer expectations. A/B testing new features and gathering data on user engagement is crucial to informed decision making.

Invest in your team. A highly skilled, motivated, and empowered team is your greatest asset. Cultivate a culture of collaboration, continuous learning, and open communication to foster innovation and drive success. Regular performance reviews and feedback sessions ensure consistent alignment with company goals.

What are two ways a company can gain a competitive advantage?

Two key ways tech companies gain a competitive edge are through cost leadership and differentiation. Cost leadership means becoming the cheapest producer of a comparable product, often achieved through economies of scale, efficient manufacturing processes, or sourcing cheaper components. Think of brands like Xiaomi, known for offering feature-rich smartphones at aggressively low prices. This strategy attracts price-sensitive consumers.

Alternatively, companies can differentiate themselves. This involves offering unique products or services with superior features, design, or user experience. Apple, for example, consistently differentiates its products through innovative design, user-friendly interfaces, and a strong brand image, commanding premium prices. This strategy attracts customers willing to pay more for superior quality or a specific brand experience. A crucial aspect of differentiation is strong R&D, allowing for continuous innovation and the introduction of cutting-edge features that set them apart from the competition.

A less-discussed strategy is niche market targeting. This involves focusing on a specific segment of the market – perhaps a particular geographical region, a specialized industry needing tailored solutions (like ruggedized smartphones for construction workers), or a niche product category (high-end audiophile headphones). This allows a company to build deep expertise and brand loyalty within that segment, effectively dominating its niche even without being the absolute lowest-cost provider or offering the most cutting-edge technology across the board. Successful niche players often build tight-knit communities around their products, enhancing customer loyalty.

Finally, innovating in business methods can also be a significant differentiator. This might involve creating unique supply chains, adopting disruptive marketing techniques, pioneering new business models (such as subscription services for software or hardware updates), or utilizing superior customer service to build brand loyalty. Examples include companies using AI-powered chatbots for efficient customer support or pioneering direct-to-consumer sales models to bypass traditional retail markups.

What determines market competition?

OMG, market competition! It’s like the ultimate shopping battle! So many factors decide how fierce the fight for my dollar is. First, the number of stores – more stores mean more choices, more sales, more amazing deals! But then there are *barriers to entry* – think of those exclusive brands only available in super-fancy department stores, making it hard for smaller, cuter boutiques to compete. It’s not fair!

Information is key! If I know one store has a killer sale and another doesn’t, guess where I’m shopping? Price comparison websites and online reviews are my best friends in this competitive jungle. And resources? That’s everything from how easy it is to find parking to the availability of the products themselves. If everyone’s sold out of that limited-edition lipstick, it’s not a very competitive market, is it? It’s all about access – and sometimes, even getting a good spot in line is a competitive advantage. The more brands fighting over my money, the better the deals!

Think about it – a market with tons of similar products, easy to get to and readily available information on prices? That’s a shopper’s paradise! But if there are only a couple of shops selling unique goods, and they’re hard to get to, with no price transparency…well, you’re at their mercy!

How can a market be perfectly competitive?

Perfect competition, a theoretical ideal, hinges on several key factors. Numerous firms must exist, each offering a homogeneous product – think interchangeable grains of rice, not luxury cars. This ensures no single entity wields pricing power. Furthermore, market transparency is crucial; buyers and sellers possess complete information regarding prices and product characteristics. This prevents exploitation and ensures efficient resource allocation. Finally, free entry and exit are paramount. Businesses can easily enter or leave the market without significant barriers, preventing monopolies from forming and ensuring continuous competition. The absence of these factors leads to market imperfections, resulting in inefficiencies and potentially higher prices for consumers.

It’s important to note that true perfect competition rarely exists in the real world. However, understanding this model provides a benchmark against which to compare real-world market structures, illuminating the degree of competition and its implications for consumers and producers alike. The closer a market approaches perfect competition, the more efficient it tends to be.