The economic principle of competition states that when supply is low and demand high:
|•||Excess profits will result|
|•||Excess profits will attract more sellers|
|•||More sellers will increase supply|
|•||Increased supply will reduce profits|
|•||Eventually equilibrium will be reached|
|•||The opposite is also true|
Profits tend to increase competition. The more profitable an enterprise is, the more competition will be created.