Monopoly May Not Be a Problem in Contestable Markets If

question 45

Multiple Choice

Monopoly may not be a problem in contestable markets if:

• A) The structure of a market is competitive.
• B) Firms can exit from the market.
• C) Antitrust regulations are enforced.
• D) Potential competition exists.

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Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers over a range of prices.

Inferior Goods

Goods whose demand decreases when consumers' income increases. They are the opposite of normal goods, which see increased demand with higher income.

Income Increase

A rise in the amount of money received, especially by workers or businesses, over a specific period.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good consumers are willing to buy.