Definition
- Competition
- Competition is rivalry between firms selling in the same market, each trying to win customers with lower prices, better quality or new products.
- Not to be confused with: Monopoly
- A monopoly is a market in which one firm produces all of the output, so buyers have no rival seller to turn to.
Test yourself
What is the difference between competition and monopoly?
In a competitive market a buyer who dislikes one firm's offer can go to another; under a monopoly there is no other.