Question

Why is competition necessary in a free-market system?

Answer 1

Competition is necessary for a free-market system to keep the economy from crashing into nothing but monopolies. Without the healthy competition of many companies offering the same goods/services, the most prominent companies would monopolize the market; Meaning that if the company chose to price a singular pair of workboots at upwards of two-thousand dollars, then the customer would have to somehow pay that amount instead of being able to check another store for a pair of workboots that are more reasonably priced for their budget.

Answer 2

If there was not any competition, then that company could be a monopoly. You would not want a monopoly as a consumer because then you'd have to pay as much for a product as the company would want you to. They could make the prices as high as they want if there is no competition. Hope I helped!! Good luck!