A Market in Which Firms Can Enter and Leave So

question 35

Multiple Choice

A market in which firms can enter and leave so easily that firms in the market face competition from potential entrants is called a

• A)contestable market.
• B)cartel.
• C)limit pricing market.
• D)monopolistic competition market.
• E)natural oligopoly.

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Definitions:

Merchandising Company

A business that purchases finished goods for resale, aiming to make a profit without changing the form of the goods.

Cost of Goods Sold

The direct costs related to the production of the goods that a company sells, including materials and labor.

Indirect Manufacturing Cost

Costs that are not directly traceable to specific units produced, such as utilities or rent for manufacturing facilities.

Relevant Range

The scope of activity within which the assumptions about fixed and variable cost behaviors hold true.