In a contestable market with one firm in the market, the existing firm will
A) set its price equal to the monopoly price.
B) set its price lower than the monopoly price.
C) set its price higher than the monopoly price.
D) have a demand curve that is horizontal at the price that will attract new firms to enter the market.
B
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A model in which individual producers act as price setters, because there are only a few sellers and the product they sell is not standardized, is called
A) imperfect competition. B) perfect competition. C) monopoly. D) monopsony.
In the balance of payments, a deficit item is any transaction
A) that leads to a receipt by a resident of a country or its government. B) that leads to a payment by a resident of a country or its government. C) that is an export of a good or service. D) that makes residents of a country worse off.