Importance of Competition in Markets
Competition is the rivalry between two or more firms in the same industry dealing with similar goods and services with an aim to maximize profits and minimize costs. Competition leads to increased efficiency in the markets which facilitates the provision of better quality products to the consumer. Also, it provides the consumer with a variety of goods and services in which he or she can choose from (Liu & Kwaku 7). Competition reduces the prices of products which makes them affordable to consumers as a result of increased demand as well as presence of many suppliers in the market.
Effects of Lack of Competition on Prices and Output
Lack of competition in markets affects both consumers and firms in the industry. First, the prices of goods and services are likely to rise since there may be one or few suppliers in the market who may decide to increase the prices of goods. Also, there are instances of low demand for goods and services which may make firms reduce their prices significantly (Barlas 363). The quantity of output is likely to reduce as the level of demand may reduce as a result of a lack of competition. The quality of output may reduce since there are few firms competing or there is no competition at all of which the existing firm may fail to meet the required quality standards (Mahmoudzadeh & Ali 523).
Role of Government in Markets
The government plays a critical role in the market despite the presence of firms. As firms are responsible for the provision of goods and services, the government is responsible for ensuring equity, increase efficiency, provide infrastructure as well as promote economic stability. The government further acts as a regulator through which it issues licenses and business permits to firms to supply goods and services in the economy. Furthermore, the government provides fiscal and monetary policies that are critical for economic growth and development in the market ecosystem of a country (Fischer & Jens 476).

Works Cited
Barlas, Stephen. “Early Biosimilars Face Hurdles to Acceptance: The FDA Has Approved Few, So Lack of Competition Is Keeping Prices High.” Pharmacy and Therapeutics 41.6 (2016): 362.
Fischer, Lisa-Britt, and Jens Newig. “Importance of actors and agency in sustainability transitions: a systematic exploration of the literature.” Sustainability 8.5 (2016): 476.
Liu, Weiping, and Kwaku Atuahene-Gima. “Enhancing product innovation performance in a dysfunctional competitive environment: The roles of competitive strategies and market-based assets.” Industrial Marketing Management 73 (2018): 7-20.
Mahmoudzadeh, Mahmoud, and Ali Seyfi. “The Effect of Product Market Competition on the Relationship between Capital Structure and Financial Performance of Companies.” International Journal of Economics and Financial Issues 7.3 (2017): 523-526.