Contestable Markets Improve the Performance of Imperfect Markets with

question 8

Multiple Choice

Contestable markets improve the performance of imperfect markets with

• A)government regulations.
• B)the threat of entry.
• C)advertising.
• D)tacit collusion.

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Definitions:

Monopoly

A market structure where a single firm controls the entire market for a particular good or service.

Demand Curves

Graphs that illustrate the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at different prices.

Monopolistically Competitive

A market structure where many firms sell products that are differentiated from one another but can act as substitutes, allowing for some control over pricing.

Shift To The Left

A term used in economics to describe a decrease in supply or demand, represented graphically by a leftward shift of the supply or demand curve.