The Theory of Contestable Markets Concludes That

question 109

Multiple Choice

The theory of contestable markets concludes that

• A)a small number of firms in an industry is strong evidence that they will perform in a noncompetitive way.
• B)even if the number of sellers in an industry is small, profits can be zero in the industry.
• C)inefficient producers can survive in a contestable market.
• D)a firm in a contestable market will sell at a price above marginal cost.
• E)all of the above

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Definitions:

Incidence

The frequency or rate at which new cases of a particular condition occur in a specified population over a given period of time.

Chronic Disorder

A long-lasting condition that can be controlled but not cured, often requiring ongoing management and treatment.

Poisson Probability Distribution

A discrete frequency distribution that expresses the probability of a given number of events occurring in a fixed interval of time or space.

Intensive Care Unit

A specialized department in a hospital that provides critical care to seriously ill patients.