The Contestable Market Model of Oligopoly Bases Pricing and Output

question 33

Multiple Choice

The contestable market model of oligopoly bases pricing and output decisions on:

• A) the threat of new entrants into the market.
• B) market structure.
• C) the degree of product differentiation.
• D) market share.

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Definitions:

Price of Clothing

Refers to the amount of money required to purchase clothing items, which can vary based on brand, quality, demand, and other factors.

Budget Line

A graphical representation of all possible combinations of two goods that can be purchased with a given budget at set prices.

Price of Food

The amount of money required to purchase food items in the market, which can vary based on factors like quality, demand, and supply.

Price of Clothing

Refers to the amount of money required to purchase garments and accessories.