Efficiency: resources will be allocated more effectively. Firms have to operate efficiently to survive. They are under the pressure to keep their costs down so that their prices are lower.
More innovations: It is argued that firms in competitive markets are more innovative because innovative firms can get a competitive edge over rivals=> the firms will develop new products, new production techniques, new technologies and materials.
Lower prices: firms cannot overcharge customers because the market is full of good substitutes and customers can easily switch from one supplier to the other.
More choices: There are many alternative suppliers. Where possible, each supplier is likely to differentiate the product from those of rivals
Better quality: consumers are rational, they consider both price and quality of products when deciding what to buy.
