Above- Normal Profits Cannot Be Sustained in Perfectly Contestable Markets

question 4

Multiple Choice

Above- normal profits cannot be sustained in perfectly contestable markets because of:

• A) the threat of 'hit and run' competition
• B) the presence of a large number of competing firms
• C) the lack of sunk costs and hence the absence of economies of scale
• D) none of the above

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Definitions:

Acceptance

The act of receiving or taking something offered or the process of embracing one's reality without attempting to change it, protest, or exit.

Identity

According to Erikson, a coherent conception of the self, made up of goals, values, and beliefs to which a person is solidly committed.

Cohabitating

Living together in a romantic relationship without being legally married.

Depressed

Experiencing a persistent mood of sadness, feeling of hopelessness, or lack of interest in activities, often a symptom of depression.