Destructive competition

Updated: Aug 20, 2021

A process of competition that drives some existing firms out of the market. Destructive competition can occur when prices are driven down to the point where some firms are unable to make a profit. Episodes of corporate failure in the coal and steel industries, some agricultural industries, and the automotive industry have been interpreted as the consequence of destructive competition. See also cut-throat competition.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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James Knight
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