Firms do not just compete on price but competition also leads firms to improve products, reduce costs and improve service quality
Firms compete in more ways than simply cutting prices. Competition also pushes businesses to make better products, lower their costs, and offer a higher quality of service.
Real World
Apple does not compete on price against cheaper Android phones — instead it invests billions in camera technology and software ecosystems, winning customers through product quality rather than undercutting rivals.
Exam Focus
Use specific examples of non-price competition (R&D, branding, after-sales service) rather than vague phrases like 'better products' to access higher marks.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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