A Single Firm Selling Its Output in a Contestable Market

question 37

Multiple Choice

A single firm selling its output in a contestable market will

• A) establish a monopoly.
• B) be able to maintain high prices indefinitely.
• C) be able to earn high economic profits indefinitely.
• D) be threatened constantly by the entry of new firms.

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Definitions:

Visual Illusions

Perceptual anomalies where the observed images differ from the actual reality, often revealing how the human brain processes information.

Theoretically Diverse

Characterized by or involving a variety of different theories, methods, or ideas in a particular field or discipline.

Kinesthetic System

The sensory system that contributes to the sense of the position and movement of parts of the body, primarily through receptors in the muscles and joints.

Positions

The locations or stances taken by individuals or groups in relation to their surroundings, opinions, or specific issues.