According to the Contestable Markets Theory

question 91

Multiple Choice

According to the contestable markets theory,

• A)even if an industry is comprised of a small number of firms, this is not sufficient evidence that the firms perform in a noncompetitive way.
• B)profits cannot be zero in an industry if the number of sellers in the industry is small.
• C)if a market is contestable, inefficient producers are more likely to survive than if the market is not contestable.
• D)profits cannot be zero in an industry if the number of sellers in the industry is large.

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Definitions:

Buyer

An individual or organization that purchases goods or services for personal use or for incorporation into products or services they provide.

Buying Center

A collection of individuals within an organization who participate in the decision-making process related to purchasing products or services.

Influencers

Individuals who have the power to affect the purchasing decisions of others, often through their authority, knowledge, or relationship with their audience.

Formal Authority

The power given to an individual or an entity based on their role or position within an organization, allowing them to make decisions and enforce rules.