Question

Discuss the differences between a policy protecting competition and a policy protecting competitors.

Answer 1

The policy protecting competition is intended to encourage the free and fair competition, whereas policy protecting competitors, is focused upon the firms and players operating in the industry. The primary beneficiary of the policy that protects competition are the consumers who get superior quality product and at a lower price. The primary beneficiary of the policy that protects competitors are the firms (specifically domestic firms). It brings inefficiency in the market and firms become dependent upon the protection provided by the government. In contrast to it, Policy protecting competition helps economy to be efficient and lets smaller firms to grow and innovate.