A Market in Which Firms Can Enter and Leave So

question 74

Multiple Choice

A market in which firms can enter and leave so easily that firms in the market face competition from potential entrants is called a

• A) monopolistic competition market.
• B) contestable market.
• C) limit- pricing market.
• D) cartel.

---

Definitions:

Share Capital

The funds that a company raises through the issuance of shares to investors, representing ownership in the company.

Fair Value

The cost at which an asset could be sold or a liability could be settled, assuming a smooth transaction occurs between participants in the market on the date of valuation.

NCI Share

Refers to the equity interest in a subsidiary not attributable directly or indirectly to the parent company, also known as non-controlling interest.

Acquisition

An acquisition is a transaction in which one company takes over controlling interest in another company, acquiring its assets and operations to expand its own business.