from The Moratorium on Brains .. Ayn Rand, George Reisman 

Competition is a by-product of productive work,  
not its goal
A creative person is motivated by the desire to achieve,  
not by the desire to beat others.

A competition presupposes some basic principles 
held in common by all the competitors, 
such as scope and levels of competence in employment
or the functions of the free market in business.

The only action which a government can take to protect free competition is:  
Laissez-faire! which, in free translation, means: Hands off!
The only actual factor required for the existence of free competition is:
the unhampered, unobstructed operation of the mechanism of a free market

There is no way to legislate competition
there are no standards by which one could define 
  • who should compete with whom, 
  • how many competitors should exist in any given field, 
  • what should be their relative strength or their so-called “relevant markets,” 
  • what prices they should charge, 
  • what methods of competition are “fair” or “unfair.” 
None of these can be answered, because  these precisely are the questions that can be answered only by the mechanism of a free market.

The concept of free competition enforced by law is a grotesque contradiction in terms. 
It means: forcing people to be free at the point of a gun. 
It means: assuming the 'protection' of individual freedom 
by the arbitrary rule of unanswerable bureaucratic edicts.

Competition, properly so-called, rests on the activity of separate, independent individuals owning and exchanging private property in the pursuit of their self-interest. It arises when two or more such individuals become rivals for the same trade.
The competition which takes place under capitalism  
acts to regulate prices simply in accordance with 
the full costs of production and with the requirements of earning a rate of profit
It does not act to drive prices to the level of “marginal costs” 
or to the point where they reflect a “scarcity” of capacity.

The competitor who cuts his/her price is fully aware of the impact on other competitors and that they will try to match his price
He/she acts in the knowledge that some of them will not be able to afford the cut, while they are, and that he/she will eventually pick up their business
A competitor is able to afford the cut when and if his/her productive efficiency is greater than theirs, which lowers his/her costs to a level they cannot match

Thus competition, under capitalism, 
is the result of a contest of efficiency, competence, ability.