Competition is an integral part of marketrelations and relations between economic entities. This is the struggle of producers for materials, raw materials and the market for the sale of products. To win in the competitive struggle means to win the consumer market and get the maximum profit from its activities. This fact of the economy is a mechanism that regulates the quantity of products produced. Consider what competition and its types are.
The presence of competition forcesmanufacturers of goods and services to improve the quality, the level of productivity, as well as to reduce the cost of production. The consequence of this is a decline in prices, as a way of fighting for the consumer. Manufacturers are forced to expand the range and quality of products. Competition and its types cover the whole market of goods and services. Ideally, the market should be attended by many manufacturers who have equal conditions for production and sales of their products. The result is perfect competition, where higher-quality goods with the lowest price win.
But in fact, this kind of competitionvies with another species. In the market there is imperfect competition. At the same time, the market is divided among several companies that have better access to materials and consumers. Let's talk about what is imperfect competition and its types.
With imperfect competition, individual companies can influence the pricing policy. There are several of its types.
Monopoly is one of the largest speciesimperfect competition. In this case, one company can keep under control a separately taken branch of production and, accordingly, the sale of products. This manufacturer is the only one in this market, and it has no competitors. This type of competition is very rare. Basically, this happens with the assistance of the state. For example, the release of a patented drug. In today's market, there is intense competition and its types, so monopolists have to withstand the attacks of other companies and over time they achieve the goal.
Oligopoly is another kind of imperfectcompetition, which is much more common. At the same time, the number of manufacturers is much larger. It can be two or more companies. In the market there can be a large assortment of one or another type of products, but only a few companies will produce it. They are also managers of pricing policy. Competition in this case also manifests itself clearly. These companies are fighting each other for a consumer of a product or service.
Another kind is monopolistic competition. In this market there are many manufacturers, but the choice of the consumer depends on the location of the product or service. Each consumer chooses a convenient way of buying.
In general, there is perfect competition in the market. Market competition and its types are the following.
Functional competition means different ways of satisfying the needs of consumers.
Species competition is based on differences in the appearance of identical products from different manufacturers.
Subject competition is a struggle between similar products, which is based on quality.
Price competition is the result of a decline in value in order to attract buyers.
There are illegal methods of competition. They are based on the creation of advertising, which negatively characterizes the competitor's goods. This includes forgery of goods from other companies.
The competition and its types to some extentare present in the market. It is the engine for developing market relations, improving the production process, quality and reducing the cost of goods and services.