The Contestable Markets Hypothesis Differs from the Requirements for Perfect

question 30

Multiple Choice

The contestable markets hypothesis differs from the requirements for perfect competition in that

• A)the former requires many competitors and the latter only one … who fears competition.
• B)the latter requires many competitors and the former only one … who fears competition.
• C)the former doesn't require freedom of entry and the latter does.
• D)the latter doesn't require freedom of entry and the former does.

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Definitions:

Natural Resources

Elements found in the natural environment such as minerals, forests, water, and fertile soil, which can be harnessed for economic profits.

Long-Run Aggregate Supply Curve

A graphical representation showing the relationship between the overall price level and the total output a economy can produce when all resources are fully employed, assuming no changes in technology or resource availability.

Technological Breakthrough

Sudden, significant progress or innovation in technology that dramatically changes industries or societies.

Energy Prices

Energy prices refer to the cost of primary sources of energy such as oil, natural gas, coal, and renewable sources, which can fluctuate based on supply, demand, geopolitical factors, and other variables.