(A) If two companies are willing to cooperate, they will compete together. (B) If two companies are not willing to cooperate, they will not compete with each other. (C) If two companies can agree to cooperate, they are not competitors. (D) If two companies can’t agree to cooperate, they are competitors.
The correct answer is B, but some people think the correct answer is D as well. If two companies can agree to cooperate, they are not competitors. This is incorrect. Because these two companies are NOT competitors, they cannot agree to mutually-agreed-upon conditions on how they will compete. They are only competitors if one company has a policy of not cooperating with its competitors; in that case, they are competitors.
So if you have a policy of not cooperating with your competitors, that then means you are a competitor. But if two companies can agree to cooperate on mutual conditions, they are not competitors.
I don’t really care about monopolistic competition at the moment, but I’m curious if you’ll say that in the future.
There is a tendency to think of competition as monopoly. But that’s not how competition works. We can have two companies competing on the same thing, but if one company is doing more of the work, it doesn’t matter who they are. So that’s kind of like saying a car company is competing on the highway with a different one. Its not the same car company. Its a different car company. So they are not competing on the highway.
Competition is based on doing a better job than someone else. But what is a better job? I think we all know what a better job is. A better team is one that is more skilled, has more money, or better connections. In other words, a better team is not competing with another team, its competing with each other.
What we’re talking about here is monopolistic competition. If there is a market leader, it’s a monopoly. So this is very different from consumer competition because these are not in competition with one another. It’s in competition with the other players. The reason why we’re talking about monopolistic competition is because it’s the type of competition where the outcome isn’t really decided by the outcome of the competition itself.
I’m not saying that in a monopolistic competition you have a monopoly, but you really cant get an equal outcome. This is a different kind of competitive competition.
In consumer competition, there are actually a lot of players who are all competing for the same thing. In monopolistic competition, there arent actually a lot of players competing for the same thing. You cant have an outcome that is an equal outcome.