Competition refers to the set of actions that sellers take against each other as they each try to increase their own profits. In actual competition, sellers alter the prices and quality of their products as they try to win larger shares of the market for a good or service from each other. In contrast, cooperation between sellers is the set of actions that sellers take in concert as they seek greater overall profits. Sellers sometimes conspire against buyers to set prices above competitive levels, but at other times they cooperate in the development of new products and technologies.

Our understanding of competition has changed over time. Most early economists agreed that competition was a combative and open-ended process. However, modern economists disagree over competition's exact nature. ...

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