In a Market That Is Contestable, but Has Only a Few

question 54

Multiple Choice

In a market that is contestable, but has only a few sellers, the

• A) threat of new entrants will prevent 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.

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Definitions:

Ancient Societies

Civilizations or cultures that existed in the distant past, often characterized by their contributions to history, art, and knowledge.

True Altruism

The act of selflessly helping others with no expectation of reciprocation or benefit to oneself.

Ethical Egoism

A moral theory suggesting that individuals should act in their own self-interest.

Kant's Theory

A philosophical doctrine attributed to Immanuel Kant, emphasizing duty, moral law, and the categorical imperative as the foundations of ethical actions.