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Among the tenets of capitalism, competition in a market economy means that there exists a large number of buyers and sellers in each market so that none have the power to significantly affect the market price. This also requires that entry and exit to/from any market is free.
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Small retail operations, such as restaurants or food stores, are in competition with each other. A major advantage of many firms offering similar products is that prices are freely set by demand and supply, rather than by one powerful seller. |
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