State true or false and justify your answer:

Competition leads to lower prices and lower quality.

It is not true that competition lowers the quality, but it is true competition lowers the prices--competition results in increasing the quality of a product. Due to competition, market performance improves, resulting in a better quality of commodities. For a business to remain the best in the market, it offers the best affordable goods of good quality. Failure to do so, customers will opt to buy from the competitor, and as a result, the sales of a company with good of low quality will go down hence decreasing income. On the other hand, competition will decrease the prices of the products due to several producers. The higher the number of suppliers, the greater the competition in the market. Since every company wants to get its customers, it will have to reduce its cost. As a result, all other firms in the industries will respond by reducing their products' cost.