CompetitionAdvantages and

disadvantages for the economy

Financial University under the Government of the Russian Federation

Nataly Cherepennikova, M1-5(U)

The concept of the competition

Advantages of the competition

Disadvantages of the competition

Every economist and every educated person know that competition is a very important part of economy. This process has a big influence on economic relations and people. Why on people too? Because all of us are big and small parts of economic relations. In this case, we are consumers or producers. So, we make a competition.

The concept of the competition

Competition is the situation in the market, where there are a large number of consumers and producers, which have their relatively small market share and they can`t make the conditions for trade and buying of commodities.

Competition has an important role in economy- it forces organizations to produce goods and services, considering interests of consumers. So, it forces to consider interests of the whole society.

The developing of the competitive relationships connected with the spitting of the economic power.

The competition implies exit and enter in the industry without barriers.

This freedom is required, because the economy can adapt with the changing of consumer`s tastes, technology and proposed resources.

Advantages of the competition

There are not unjustified price increases

The improving of the quality of goods

The engine of the technological progressThe increase of the economic efficiency

It`s a tool for the achievement of the “price-quality” balance

Disadvantages of the competition

Good from the other producer may be betterIt`s more difficult to draw

consumersIt`s a risk to be “pressed out” from the market

Competition is based on the axes to grindThe motivation to crimes and

frauds is increase

It makes businesses definitely unstable

Unemployment and bankruptcy

Competition is the driving force in the economic relations. It gives the push for the developing in many ways. For example, we haven`t got the technical progress or developing in the public opinion without competition. Competition in economy has a big influence on many spheres of living. It makes the progress.

Thank you for

your attention!