Asked by
deanthony clark
on Dec 12, 2024Verified
Even when there are only a few firms in a market, the market can still be competitive as long as barriers to entry are low. Markets of this type are called
A) monopolistic markets.
B) price-taker markets.
C) contestable markets.
D) convertible markets.
Contestable Markets
Markets where the entry and exit of firms are so easy that the market always remains competitive, ensuring that prices remain close to marginal costs.
Barriers To Entry
obstacles that make it difficult for new competitors to enter a market, including high startup costs, access to technology, and stringent regulations.
Competitive
Characterizes a market scenario where multiple sellers strive to attract customers by offering better terms, prices, or products.
- Contrast contestable markets with competitive markets by examining the barriers to entry and exit, along with the effects these factors have on market outcomes.
Verified Answer
JK
Learning Objectives
- Contrast contestable markets with competitive markets by examining the barriers to entry and exit, along with the effects these factors have on market outcomes.