Tip 1: Everything about competition in the economy
Tip 1: Everything about competition in the economy
Competition in the economy is a process, withwhich, as a result of interaction and struggle between enterprises, provides the best conditions for selling products of each particular company. Economic competition is the impetus for the development of a single enterprise and the entire economy.
Economic role
Over the past two decades, competition hasRapidly increased and continues to grow all over the world. But in the beginning of the century, rivalry between the organizations was not so fierce. This was because governments and large cartels were holding back the growth of competition. Today, there are practically no such industries that are not subject to its influence. Competition can bring diametrically opposite results. For the winners - the multiplication of their own wealth, fame and secured, sometimes for several generations ahead, life. For the losers - ruin, poverty, inflation, instability, unemployment, and so on. Adam Smith described competitive behavior as an honest rivalry, the main instrument of which was price pressure. In the 21st century this definition changed. Often the opportunity to influence the price is missing. Modern competition means the struggle between the old and the new. This appeal to new technologies, new types of organization, new products and ideas. Thanks to a new interpretation, competition has had a significant impact on the economy as a whole.Types of competition
The methods of confrontation distinguish between competitionprice and non-price. In the first case, economic victory is achieved through the sale of goods and services at lower prices than those of competing companies. The reduction in prices can be achieved by reducing production costs or by reducing revenues. Small companies can reduce prices for a relatively short period, while large enterprises have enough resources to completely abandon profits, if this helps squeeze out competitors from the market. The victory will allow them to significantly increase the price in the future, which compensates for all losses. Non-price competition does not affect price changes. In this case, such methods as advertising, the use of special technologies, the provision of after-sales services come into play. It turns out that the goods come in better quality than the competitor. Usually the rate is made on the ecological compatibility of the goods, aesthetics and safety in use. In the struggle for a place under the economic sun, some companies resort to unfair competition. Its methods are false advertising, industrial espionage, the sale of goods at a price below cost, separate contracts with some competitors.Tip 2: Competition as an element of the market mechanism
Competition is an economic rivalryseparate subjects of the market economy for the satisfaction of their economic interests. Competition - the most important element of a market economy, because it is the main incentive for business.
Instructions
1
Demand, supply and competition - the mainelements of the market mechanism of pricing. Under the impact of supply and demand in an efficient market conditions, an equilibrium price should be formed, while individual producers can not have a significant impact on the price. Equilibrium of supply and demand is possible only in conditions of perfect competition. In a real economy, it is virtually impossible to fully ensure such conditions, so a genuine price equilibrium that would satisfy sellers and buyers can only be considered theoretically. In reality, economic entities often work in conditions of imperfect competition, in which case individual producers can affect market prices.
2
An enterprise operating in a market economyeconomy, strive to bypass their competitors, profit and win new markets. Methods of competitive struggle are divided into price and non-price. Price competition is based on price management, while actively using price discrimination, when the same goods are sold to different groups of consumers at different prices. Non-price methods are aimed at improving the quality of the product and the conditions for its implementation, as well as improving the quality of customer service.
3
The competition can develop within a certainindustry or between market participants who work in different industries. Competition among manufacturers of one branch allows to reveal noncompetitive and to stimulate effective manufacturers. Interindustry competition arises because of different rates of profit in certain industries, this kind of competition stimulates the modernization and optimization of various industries.
4
Allocate horizontal and verticalcompetition. Horizontal competition is a kind of intra-industry competition, with such competition in the market competitors of one type of product compete. Vertical competition - a kind of inter-industry competition, with this kind of competition rivals the producers of products and services that can meet the same customer need.
5
Competition in an imperfect market canlead to the formation of various monopolistic associations. Such groups of commodity producers can influence the price of goods, they seek to ensure a stable position in the market or take a certain share.
Tip 3: What is competition?
Competition is a competition between actors in the economic sense of the word. Without competition, the market could not exist in the form in which it is presented to society now.
Instructions
1
Based on the notion of market competition,It should be noted that this kind of rivalry arises if you want to sell your goods as profitable as possible. Market participants are fighting for the best place, attracting and capturing the attention of buyers with the aim of more profitable sale, capture of the greater part of the market and making profit. For the market an important and universal factor in a competitive environment is the price of the goods.
2
Due to competition, consumers have more opportunities to choose for themselves a more suitable and high-quality product on the market.
3
Competition, like the game, is subject to certainrules. Often, participants also give themselves the will to neglect this set of rules, thereby making competition illegal. The latter type is common among entities engaged in illegal activities, whether it is selling unlicensed disks or clandestine manufacturing of cleaning products. Since the activity is not legalized, then in this case there is an illegal rivalry. In such cases, the case may even reach the "compulsory disappearance" of the main competitive person. In view of this, many scientists view competition as a struggle and subject this process to long-term research.
4
Despite all the difficulties caused bycompetitive struggle, the competition is very useful for the society. This kind of competition stimulates producers to produce new types of goods on the market, to improve the range of products. Consumers in this situation are able to evaluate innovations, giving preference to a particular product.
5
Competition takes place only whereowners of their business and producers of goods have unlimited freedom, namely: an independent choice of suppliers and consumers, the right to dispose of profits, independent management of production.
Council 4: What is the antimonopoly service
It is believed that the economy is subject to the same lawsdevelopment and evolution, as in living nature, i.e. "Viable", quality goods can be produced only in conditions of competition. When each manufacturer has the same opportunity to go out with his product to the market, the consumer has the opportunity to choose and purchase the best. A monopolist can produce goods of poor quality, but consumers will still have to purchase them, since no other simply exists.
What is competition?
A whole law is dedicated to her, which is called- "On Protection of Competition". This normative document defines competition as a rivalry between at least two economic entities in conditions when none of them can unilaterally influence the terms of sale of goods and services produced by them. Accordingly, to the unfair competition law includes such actions of an economic entity, one or several, which are aimed at obtaining advantages in the implementation of entrepreneurial activities. Since such actions do not guarantee equal terms of sale, unfair competition is a factor hampering the development of enterprises offering better quality products and does not guarantee the consumer the opportunity to independently choose the product or service that suits him more. Such activities are considered illegal and a special Federal Antimonopoly Service (FAS) has been established to identify and suppress it.Functions of the Federal Antimonopoly Service
Control over observance of market laws andfree competition in Russia is entrusted to the FAS, whose function is to analyze the state of competition in order to identify the dominant position of a particular entity, to identify cases of restriction or elimination of competition, and to prevent such cases. The FAS was established in 2004 by the Presidential Decree, the main document , regulating its activities, is the "Regulations on the Federal Antimonopoly Service". This state organization is endowed with great powers and controls compliance of antimonopoly legislation with commercial and non-commercial organizations. In addition, its functions include control over enterprises that are natural monopolists whose actions can infringe the interests of consumers of the goods produced by them. The FAS also controls the subjects of the wholesale and retail electricity markets, which, for objective reasons, occupy an exclusive position in these markets. Broad powers allow the antimonopoly service to apply to violators the measures of influence provided for by law, which are restrictive and preventive as well as preventive. It is assumed that these measures can eliminate unfair competition and fully ensure the rights of consumers of goods and services.Tip 5: What is a syndicate?
The syndicate in the modern sense is acceptedto call a cartel-type agreement characterized by a joint sale of producer goods through a single joint-stock company while preserving the production and legal independence of the participants.
