If a market is contestable, the market will be characterized by
a. minimum-cost production methods and a competitive (normal) profit rate.
b. high barriers to entry and a small number of suppliers.
c. prices in excess of production costs and mergers leading to monopoly.
d. a large number of suppliers offering a homogeneous product.
A
You might also like to view...
Scarcity arises because
A) resources are finite and are inadequate to meet all human wants. B) production of goods and services is always slow. C) companies are slow to explore for new resources. D) a large number of people live in poverty.
The greater the the number and closeness of substitutes available between monopolistically competitive firms
A) the greater the ability of a firm to raise its price above the price of close substitutes. B) the smaller the ability of a firm to raise its price above the price of close substitutes. C) the more inelastic the demand curve. D) the greater the positive economic profits for a single firm.