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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