Competition

The struggle among producers for the dollars of consumers

Three facts

  • Competition is the regulating force of the free market
  • Consumers want the lowest prices, while firms want the highest
  • Self-interest motivates the Free Market

Markets

Smart Phones -Samsung v. Apple - S5 v. iPhone 6

Samsung Galaxy S5

  • 5.1 inches in size
  • auto focus on camera
  • 2.1 megapixel front camera

iPhone 6

  • 1.2 megapixel front-facing camera
  • 4.7 inches in size
  • tap to focus on camera

One way they compete is through features

They force each other to innovate through competition

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Fast Food - Burger King v. McDonalds - Big Mac v. Whopper

Big Mac


  • (2) 1.6 oz. beef patties
  • American Cheese
  • "Special Sauce"
Whopper
  • (1) 4 oz. beef patty
  • sesame seed bun
  • tomato
They compete through seasoning, cooking method, and extras on sandwiches.

They make each other better by constantly trying to lower prices.

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Cola - Pepsico v. The Coca-Cola Company - Pepsi v. Coke

Coke

  • 39 g of carbohydrates
  • 45 mg of sodium
  • 39 g of sugar
Pepsi

  • 20 g of carbohydrates
  • 25 mg of sodium
  • 20 g of sugar
They compete through availability. (Some restaurants only serve one or the other)

The make each other better by trying to lower sugar while maintaining taste, and by getting restaurants to carry their product, exclusively.

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