If a Contestable Market Has Only One Seller, Which of the Following

question 71

Multiple Choice

If a contestable market has only one seller, which of the following will keep the seller from producing inefficiently and charging a price that generates long-run economic profits?

• A) government regulations
• B) low costs of entry into and exit from the market
• C) substantial economies of scale that provide a competitive advantage to large firms in such markets
• D) the threat of a government takeover of the firms in these markets

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Definitions:

Managing by Exception

A management strategy where leaders only intervene or take action in cases of significant deviation from set standards or performance.

Public Relations Functions

Public relations functions involve managing communication between an organization and its publics, including managing reputation, media relations, and stakeholder engagement.

Professional Bureaucracy

An organizational structure dominated by professionals who have control over their own work and decision-making processes.

Machine Bureaucracy

A highly structured organizational form that operates through strict procedures and rules, with tasks clearly defined and hierarchical authority.