Competition - is the engine of social progress

competition - is an essential condition for the proper functioning of any market economy.The market needs to ensure the most effective use of limited resources, the best coordination of plans of buyers and sellers, according to the distribution of income achieved results.All this can be achieved only in conditions of competition between manufacturers.As practice shows, the competition and the market are the mechanisms of the economic system.

term "competition" - is a multifaceted concept that can not be covered by one universal definition.Competition - competition, competition between producers acting in the market for the most profitable opportunities of production and marketing and obtaining the maximum possible profit.

theory of competition

theory of competition and the role of competition in regulating the market economy originated in the classical political economy of several hundred years ago.Adam Smith first began to talk about the key role that the competition has to automatically adjus

t the price on the open market.Smith said that the competition - it is the "invisible hand", forcing sellers to set prices in line with demand for these products from buyers.Thus, the highly competitive market itself is able to generate equilibrium price.

In future understanding of this notion considerably broadens and deepens.As a result, various types have been isolated and competitive types, differing primarily in the level of concentration of competing merchants market similar products.There has been a division of the concept of "competition" for its two types: "perfect" and "imperfect."Characteristically, Ricardo, Smith and other early researchers have increasingly looked perfect competition and imperfect competition has been investigated in detail in later works.

Signs of perfect competition:

· At the same time the market is functioning a lot of small companies.

· The market is made of homogeneous products.

· In the field there are no barriers to entry and exit.

· Have equal access to different kinds of information.

· The horizontal demand curve for all competitors.

· None of the companies are not able to have on the market price of a significant impact.

Functions competition:

1. Create a selection mechanism for effective solutions.

2. Stimulating function.

3. Differentiation or bundle products manufacturers.

Thus, the competition - it is really the engine of social progress.

competition in the Russian economy

In our country, the competitive environment increasingly shaped in large cities and especially affects such areas as the sale of personal computers, catering, publishing, retail, transportation and more.

analysis of the problem of formation of the competitive environment in Russia makes it possible to isolate three main components of the competition:

· Competition in the domestic market between the local producers.

· Competition in the domestic market between foreign and domestic producers.

· Competition in foreign markets between foreign and domestic producers.

in a fairly sharp opening markets in Russia for foreign firms a significant share of domestic enterprises of key industries in the domestic market was uncompetitive.As a result, the main task was survival of the best domestic producers in an open fierce competition with foreign companies.