Will a lack of competition result in lower prices?
Asked 4 years ago
Which factor in the market causes product prices to become lower? Is it the lack of competition?
Joseph Murray
Sunday, February 20, 2022
No, that is not correct. The absence of competition creates a monopolistic environment where the market players can dictate prices. On the contrary, increased competition forces the producers to keep their prices reasonable.
Besides that, many other factors can decrease the price. For instance, lower cost of production, lower demand, low purchasing power, cheap labor wages, reduced cost of capital, taxes, and government intervention may cause the price reduction.
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