ABSTRACT
In this chapter, the author utilises the simple words 'competition' and 'competitive industry' to describe a situation where large numbers of firms compete in a market. In reality, there will be many situations where small numbers of firms, or even one firm, are selling in a given market. Large sections of British industry have until been protected by collective pricing agreements from the full effects of price competition within their home markets. Every pricing decision affects a number of variables, some or all of which will be related to each other in some way. The attraction of using a computer to simulate what human beings do when they take pricing decisions is that one might then be able to understand what happens well enough either to make the decision process more routine or to computerize it altogether. The chapter also presents an overview of the key concepts discussed in this book.
