In a Contestable Market

question 116

Multiple Choice

In a contestable market,

• A)Product differentiation results in nonprice competition as well as price competition.
• B)There are economies of scale that heighten competition.
• C)Barriers to entry and long-run economic profits are low.

---

Definitions:

Corporations

Legal entities that are separate from their owners, with the ability to own property, incur liabilities, and sell stock.

Corporation

A business firm that is a legal person. Its chief advantage is that each owner’s liability is limited to the amount of money he or she invested in the company.

Stockholders

Individuals or entities that own shares in a corporation, possessing ownership interests and rights to dividends.

Owned

The state of having legal rights to possess, use, and control a property or asset.