Final answer:
Competition between numerous small businesses is assumed to benefit the economy by promoting innovation, improving product quality, and helping keep prices reasonable for consumers.
Step-by-step explanation:
In the legal environment of the United States, competition between numerous small businesses is assumed to benefit the economy. Competition promotes innovation, improves the quality of products and services, and helps keep prices reasonable for consumers. It also creates job opportunities and drives economic growth.
Competition can reduce a business's profits if other firms offer better or cheaper products, but it also incentivizes businesses to improve and stay competitive. For example, if a small coffee shop faces competition from a larger chain, it may need to offer better service or unique products to attract customers.
Overall, competition drives market efficiency and encourages businesses to adapt and innovate in order to thrive in a competitive environment.