As Long as a Market Is Contestable, Then Even If

question 160

Multiple Choice

As long as a market is contestable, then even if it has only a few sellers, the

• A) threat of new entrants will prevent the prices from rising above the competitive level.
• B) producers will be able to charge prices that are high enough to produce long-run economic profits.
• C) producers will not face new competition because the barriers to entry are high.
• D) market will never be expected to come close to the competitive result.