Under Capitalism, competition is a driving force that allows the market economy
ID: 1138842 • Letter: U
Question
Under Capitalism, competition is a driving force that allows the market economy to work, affecting the supply of goods and services in the marketplace and the prices consumers pay for those goods and services. Have you thought about how competition has a daily impact on your life and your buying habits? Let's see how competition works by pretending that you want to buy a new car. A. How will you decide on the make and model of the car you want to buy, where to buy the car, and how to finance the purchase? Specify the make and model (new/used), and why you've made that choice. (Assume you can negotiate a "best deal" for each possible car.) B. How is competition at work in this scenario?Explanation / Answer
Answer:
a. Generally we decide to buy any product/ car on the basis of its price and the satisfaction we will be getting from the use of the product. If we want to buy a car, firstly we will look at the prices and the features (space/ seats, average etc.) of the car. We will buy from the company which gives more facilities while providing the car like fast paper work, test driving, payment-installments and servicing facilities etc. to finance the car either we can take loans from the banks or can take financing facilities are being provided by the dealers we will choose the best option which will be beneficial for us and low costly means low interest rates.
b. The increasing competition among car companies in the market plays important role in our selection of car because being a rational consumer we will choose the car which will be affordable for us with more benefits are being given by the dealers. Due to the increasing competition in the markets dealers give many offers to their customers to attract more customers. So this increasing competition among companies works in favor of customers as they get many facilities while buying a car and they choose the company which provides better facilities compare to others.
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