An Important Condition for a Contestable Market Is

question 2

Multiple Choice

An important condition for a contestable market is:

• A) all producers have different technologies.
• B) there are high transaction costs.
• C) existing firms cannot respond quickly to entry by lowering their price.
• D) there are sunk costs.

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Definitions:

Ponzi Scheme

A fraudulent investing scam promising high rates of return with little risk by paying earlier investors with the funds from more recent investors.

Bait And Switch

A deceptive marketing practice where customers are lured with the promise of a product or service at a certain price, only to find it unavailable and replaced with a more expensive option.

Account Kiting

The illegal practice of exploiting banking systems to create artificial funds by writing checks between several accounts.

Probable Cause

A standard of reasonable belief, based on facts, that is required to arrest a person, conduct a search, or seize property in legal proceedings.