The Price in a Contestable Market Is Similar to That

question 83

Multiple Choice

The price in a contestable market is similar to that in a perfectly competitive market because

• A)firms in the market make an economic profit in the long run.
• B)there are no barriers to entry.
• C)there are many firms in the market.
• D)the Nash equilibrium is that all firms cheat.
• E)collusion is possible.

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Definitions:

Fixed Exchange Rate

A government or central bank policy that pegs the country's currency to another currency or to a reference value, such as gold, and does not allow it to fluctuate freely in the Forex market.

Extremism

The holding of extreme political or religious views and the actions taken to support or achieve them.

Trade Control

Government-imposed restrictions on the free exchange of goods and services between countries, including tariffs, quotas, and import licenses.

Property Rights

Legal rights over the use, control, and transfer of property, which can include intellectual property, real estate, and physical assets.