Explain the effect of competition on buyers and sellers

Explanation should include the following concepts:

  • Competition is a characteristic of the free enterprise system.
  • Competition between sellers provides better-quality products at lower prices for buyers.
  • Competition can be direct or indirect.
  • Competition can be based on price or non-price factors. 

Process/Skill Questions:

  • How does competition affect business decision-making?
  • What are the differences between direct and indirect competitors?
  • How do businesses use competition to attract customers?
  • What are examples of non-price competition? What factors other than price attract customers to a business?