The race to the bottom refers to the intensification of competition between countries, states or companies, when product quality or rational economic decisions are sacrificed in order to gain a competitive advantage or reduce the cost of production.
It is most often used in the context of capturing market share or in labor markets and refers to the efforts of companies to move production and operations to areas with lower labor costs and fewer worker rights.
The race to the bottom can have a negative impact on the competitors, often with disastrous consequences.
“Best Effort” is a legal term that represents the obligation of a party to a contract to take all possible steps to fulfill the terms of the agreement.
Disequilibrium is when external forces cause an imbalance between supply and demand in the market. In response, the market enters a state in which supply and demand do not match.
Economic equilibrium is a state in which market forces are balanced, a concept borrowed from the physical sciences, where observable physical forces can balance each other.
An economist is an expert who studies the relationship between a society’s resources and its production or output, using a number of different indicators to predict future trends.
A trade-off between equity and efficiency arises when there is some conflict between maximizing net economic efficiency and achieving other social goals.