If a contestable market has only one seller, which of the following will keep the seller from producing inefficiently and charging a price that generates long-run economic profits?
a. government regulations
b. low costs of entry into and exit from the market
c. substantial economies of scale that provide a competitive advantage to large firms in such markets
d. the threat of a government takeover of the firms in these markets
B
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In 1940, military spending amounted to roughly _____ of GDP; by 1943, it had risen to roughly ________ of GDP
a. 20 percent; 30 percent b. 2 percent; 40 percent c. 15 percent; 20 percent d. 1 percent; 25 percent
Physicians salaries increased substantially over the decade 1995-2005 from an average of $215,000 to $315,000 . What is the best explanation for this?
a. Physicians were smarter in 2005 than in 1995. b. The supply of physicians has increased. c. The supply of physicians has decreased. d. The demand for physicians has increased. e. The demand for physicians has decreased.