Yo, let me tell you a story ’bout the market that went down the drain because of competition. So, there was this small town in the midwest that had only one grocery store for years. The store was owned by a family who had been living in the town for generations. They knew everyone in the town and they had built a good relationship with their customers. The prices were reasonable, and the quality of the products was excellent.
Then one day, a big supermarket chain decided to open a store in the town. They had a huge selection of products, and they offered lower prices than the small grocery store. People were excited about having more options, so they started shopping at the new supermarket. At first, the small grocery store tried to compete by lowering their prices, but they couldn’t keep up with the big chain.
As a result, the small grocery store started losing customers, and they were forced to reduce their output. They couldn’t afford to keep as many products on their shelves, and they had to lay off some of their employees. The quality of their products also suffered because they couldn’t afford to buy the best ingredients anymore.
The big supermarket chain had a monopoly over the market, and they could set the prices as low as they wanted to drive the small grocery store out of business. They didn’t care about the impact they had on the town or the people who worked at the small store.
In the end, the small grocery store went bankrupt, and the town lost a valuable asset. The big supermarket chain was the only option left, and the prices went up because they no longer had any competition. The people of the town had to pay more for their groceries, and they didn’t have the same personal relationship with the new store.
This is a sad example of how competition can sometimes lead to lower output. When one company has a monopoly over the market, they can set the prices as low as they want, which drives smaller companies out of business. It’s important to have a balance of competition to ensure that consumers have choices and that companies are held accountable for their actions.