In a Contestable Market, _____

question 32

Multiple Choice

In a contestable market, _____.

• A) potential entrants do not have access to the same technology as incumbent firms
• B) sunk costs are likely to be zero
• C) incumbent firms find it difficult to exit because of high sunk costs
• D) there are high barriers to entry

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Definitions:

Per Capita Income

An average income earned per person in a given area (city, region, country) in a specified year, often used as an indicator of the economic health of a region.

Laspeyres Price Index

The Laspeyres Price Index measures the change in the price of a basket of goods and services over time, using the quantities of the base period.

Base Year

A specific year chosen as a point of reference or benchmark for economic or financial calculations, such as indexing or comparing prices.

Current Year

The ongoing calendar year during which an event or measurement is taking place.