The ability to compete in markets for goods or services. This is based on a combination of price and quality. With equal quality and an established reputation, suppliers are competitive only if their prices are as low as those of rivals. A new supplier without an established reputation may need a lower price than rivals to compete. With lower quality than rivals, a firm may not be competitive even with a low price; with a reputation for superior quality, a supplier may be competitive even with a higher price than rivals. Similar propositions apply to a country’s exports.
|Reference: Oxford Press Dictonary of Economics, 5th edt.|