Asked by
Aashruti Patel
on Dec 12, 2024
Verified
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
Low Costs
Describes situations or processes that require a minimal amount of financial resources to maintain or complete.
Long-run Economic Profits
Profits that occur when a firm's total revenue exceeds its total costs, including both explicit and implicit costs, over the long term.
- Analyze the variances between contestable markets and competitive markets, with emphasis on entry and exit restrictions and their outcomes on the market.
Verified Answer
HS
Learning Objectives
- Analyze the variances between contestable markets and competitive markets, with emphasis on entry and exit restrictions and their outcomes on the market.