Question

How does competition, whether domestic or foreign, harm businesses?

Short answer

Competition harms businesses by cutting wages and job opportunities.

Step-by-step solution

Step 1. Concept

Domestic business & foreign firms create competition among producers of similar goods & services that impacts the price of goods, wages of workers, and employment.

Step 2. Explanation 

When a firm competes with another domestic or foreign firm in the industry, they face the risk of loosing market share. They might even be forced out of the market because of severe competition. This can cause loss of employment for the workers employed in that firm.