market for a necessary good is competitive in which the existing firms are earning super normal profit. How can the policy of liberalization of the government help in making the market more competitive in the interest of the consumer? explain.

Liberalisation will remove barriers of entry for potential entrants and therefore, will result in an increase in competition among the firms already prevailing in the market. To maintain their sales and profitability, they would have to reduce the price of the commodity. The firms would now be able to earns only normal profits as they are bound to reduce the prices. hence, we can say that, policy of liberalization of the government help in making the market more competitive in the interest of the consumer.

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