Many small firms seek to establish a particular niche in the market, realizing that they cannot afford to operate on a larger scale without exposing themselves to considerable risk of retaliation from larger companies. When a number of small businesses are operating in this manner, they are forcing the larger businesses to recognize and account for their influence on the market. In this way, small businesses are primarily

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Small businesses that establish a particular niche in the market are fostering competition, as they are forcing larger businesses to recognize and account for their influence on the market. This creates a more competitive environment, benefiting consumers and promoting economic growth. While small businesses can also provide technical innovation, create jobs, satisfy the needs of other businesses, or avoid competition, the primary benefit in the scenario described is fostering competition.

Many Small Firms Seek to Establish a Particular Niche in the Market