Explain the role of competition

in a free market. Illustrate your answer with examples of

businesses in your local economy

Competition plays a key role in the market.

It drives prices down, due to companies wanting to beat their competition, while also forcing companies to produce new technology, such as iPhones, as Apple wants to make more money than Microsoft.

An example would McDonalds having a buy one get one free cheeseburger sale, and the local BurgerKing responds by having a buy one get two.