The effects of competition

John Pope — Sat, 25 Jul 2009 17:34:10 +0000

When I was a boy I didn’t understand the idea of monopol. In high school I didn’t understand why the government intervenes whenever there’s a chance of a monopoly in the market. Now, after many years I truly understand why it’s not good to have a monopoly. A monopoly is bad because the only one that benefits from it is the person/company that controls the monopol: the rest only have to loose.

Without competition we would wear the same clothes

If you control a monopoly you control the price of the product/service you sell because you’re the only one selling it. You don’t do anything to improve the product, because you don’t need to, people will buy the same product over and over if it’s a demand for it and only you can provide it.

Now, let’s see what advantages the competition brings. First, competition is like a race where the best wins the most and the worst wins the least. Best means cheaper, more reliable, faster, you name it. All those attributes help you, the consumer, as you gen a better product for the same amount of money. Competition makes companies invest more in research, which leads to new discoveries, meaning new things that improve our lives.

I’ll give you only one recent example of the benefits of the competition: LG is the first big company that announce it will produce a watch phone, the GD910, which will launch shortly in UK and US for aroud 1600 $. Yesterday Samsung annouced the world’s slimmest watch phone, the S9110, that has better specs than LG’s product in a smaller case, plus it will sell for under 700 $. I bet that in the next 2-3 years we’ll get better watch phones for under 200 $. Wouldn’t you agree?

The effects of competition is an article from JohnPopes.com blog.
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The effects of competition

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