how does the limited competition lead to manipulation of prices
Answers
Limited competition is used in the context when there are less number of sellers in the market selling similar products. This reduces the degree of competition in the market . This also limits the choice for consumers. Further, consumers are compelled to buy products available in the market which is offered by less number of manufacturers. This is generally witnessed in when few specific producers have a monopoly over product, they are thus in a position to charge high price, compromise on the quality of goods and exploit consumers.
In an era of profound and unsettling global change where we witness integration of economies, greater production of goods and services opening a wide variety of choice to the consumers, it is imperative to empower the consumers. Greater choices also open a plethora of problems for consumers who become vulnerable to aggressive business strategies and are swayed by their promotional tricks. With the advancements in technology, innovation, excessive competition it is important to generate awareness among consumers about the type, price and utility of the product. It is equally important to promote general awareness about the rights of the consumers by encouraging consumer education and supplying information. We also need to enlighten consumers about the redresssal mechanisms and legal remedies. Growing less or incomplete information to consumers result in exploitation. All information about the product, its ingredients, date of manufacturing, precaution of use etc. should be given to the consumers. Consumers needs to fully informed about the services offered and charged accordingly.
When competition is limited for a service or product, it can lead to a monopoly. If a business is in this position, the owner can charge higher prices to the consumer. The consumer has to decide if he is willing to pay the price.