In a competitive market, why do firms compete for consumers?

Firms compete for consumers in a competitive market primarily to gain market share and ensure their survival. Competition drives businesses to differentiate their products and improve services to attract consumers, making it essential for their profitability and longevity. When firms successfully attract more consumers, they can increase their sales volume and revenue, which is critical in maintaining their operations and investing in future growth.

In a competitive market, if a firm fails to attract consumers, it risks losing market share to rivals, which could ultimately threaten its survival. Consequently, the desire to gain market share motivates firms to innovate, lower prices, enhance quality, and offer better customer service—all strategies that aim to entice consumers away from competitors.

In contrast, the other options relate to outcomes or situations that do not align with the primary motivation behind competition in a market. Maximizing costs would be counterproductive for firms, ensuring fewer consumers does not support business viability, and focusing on production inefficiencies would divert attention away from competitive strategies that attract consumers. Therefore, the drive to gain market share and survive stands as a key rationale for the competitive behavior of firms in the market.