In a sequential contestable market game
A) a small number of firms can behave like firms in perfect competition.
B) the outcome is always a monopoly equilibrium.
C) the dominant firm always makes a monopoly profit, while other firms make zero economic profits.
D) a firm that enters the market first is protected from potential entrants by natural barriers.
A
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In the figure above, suppose that Mac and Izzie trade and reach point c. Then
A) Mac produces outside his production possibilities frontier. B) Izzie produces outside her production possibilities frontier. C) Mac and Izzie both produce outside their production possibilities frontiers. D) neither Mac nor Izzie produce outside their production possibilities frontiers.
If a market is controlled by a perfect-price-discriminating monopoly, then
A) a deadweight loss is generated. B) there is no consumer surplus. C) consumer surplus is the same as under perfect competition. D) output is less than that of a single-price monopoly.