In a competitive market, competition happens when two or more businesses:

• A. strive to attract the same customers by offering similar products or services
• B. avoid entering the same market to reduce rivalry
• C. merge to form a monopoly and eliminate rivals
• D. collaborate to set prices and control market supply

Answer: (A)

Verified step by step guidance

1. Understand the concept of competition in a competitive market: it occurs when businesses vie for the same customers by offering products or services that are similar or substitutable.
2. Recognize that competition involves businesses trying to attract customers, which typically means they offer comparable goods or services to meet consumer demand.
3. Eliminate options that describe behaviors inconsistent with competition, such as avoiding the same market (which reduces competition), merging to form a monopoly (which eliminates competition), or collaborating to set prices (which is collusion, not competition).
4. Focus on the option that highlights businesses striving to attract the same customers by offering similar products or services, as this directly reflects the nature of competition in a market.
5. Conclude that competition in a competitive market is best described by businesses competing for customers through similar offerings, which drives market efficiency and consumer choice.