In the Contestable Market Model, an Oligopoly with No Barriers

question 21

Multiple Choice

In the contestable market model, an oligopoly with no barriers to entry sets a:

• A) monopoly price.
• B) price that significantly exceeds average total cost.
• C) price that is equal to average total cost.
• D) collusive price.

---

Definitions:

Bond Issuing

The process by which a borrower (corporate or governmental) raises funds by selling bonds to investors.

Coupon Rate

The interest rate stated on a bond or other fixed-income security, determining the periodic interest payments to the bondholders.

Discount

The reduction applied to the face value of a bond or the lower than market price of an asset.

Par Value

The face value of a bond or stock as stated by the issuing company, which may differ from its market value.