In a Contestable Market

question 93

Multiple Choice

In a contestable market,

• A)Entry occurs when prices rise above average total costs.
• B)Many firms compete,which drives prices down to minimum long-run average total cost.
• C)A few firms use predatory prices to achieve market share.
• D)A few firms collude to achieve monopoly profits.

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Definitions:

Present Obligations

Current commitments arising from past events, expected to lead to an outflow of resources embodying economic benefits.

Past Transactions

Financial activities or deals that have been completed in the past, impacting the financial position of a business.

Direct Method

A cash flow statement approach that lists major categories of gross cash receipts and payments, providing a clearer view of a company's cash flow from operational activities.

Cash Flow Statement

A financial report that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.