COMPETITION 

Line 1-2: Rivalry among businesses and service industries is called competition.
Line 3-5: This feature of a market encourages businesses to improve their goods and services, keep their prices affordable, and offer new products to attract more buyers.

Line 6-8: There are four basic types of competition in business that form a continuum: pure competition, monopolistic competition, oligopoly, and monopoly (see diagram).
Line 9-11: At one end of the continuum, pure competition occurs when every company offers a similar product. Companies that deal in commodities such as wheat or corn are often involved in pure competition.
Line 12-13: In this type of competition, it is often the ease and efficiency of distribution that influence purchases.

Line 14-16: In contrast, in monopolistic competition, several companies may compete for the sale of items that can be substituted for one another.
Line 17-18: The classic example of monopolistic competition is coffee and tea. If the price of one is perceived as too high, consumers may begin to purchase the other.
Line 19: Coupons and other discounts are often used as part of marketing strategies to influence sales.

Line 20-22: Oligopoly occurs when a few companies dominate the sales of a product or service. For example, only five airline carriers control more than 70 percent of all ticket sales in the United States.
Line 23-25: In an oligopoly, serious competition is not considered desirable because it would result in reduced revenue for every company in the group. Although price wars do occur, in which all companies offer substantial savings to customers,
Line 26: a somewhat similar tendency to raise prices simultaneously is also common.

Line 27-29: Finally, a monopoly occurs when only one firm sells the product. Some monopolies have been tolerated for producers of goods and services considered basic or essential, including electricity and water.
Line 30-31: In these cases, it is government control, rather than competition, that protects and influences sales.
Line 32: The following chart represents the competition continuum.