How do you think the theory of contestable markets has been used as a means of arguing for weaker enforcement of antitrust laws? Explain

What will be an ideal response?


The theory of contestable markets can be used to argue for weaker enforcement of antitrust laws by observing that a monopoly market may not prove that a firm is exploiting its market power to control the price level since excess profits will quickly lead to entry by new firms.

Economics

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If people expect the dollar to depreciate, then the

A) demand for dollars will decrease, the supply of dollars will increase, and the exchange rate will fall. B) demand for dollars will decrease, the supply of dollars will not change, and the exchange rate will fall. C) supply of dollars will increase, the demand for dollars will not change, and the exchange rate will fall. D) demand for dollars will increase, the supply of dollars will decrease, and the exchange rate will rise.

Economics

Money is each of the following except

A) a medium of exchange. B) a store of value. C) a means by which the central bank can always, and permanently, affect production. D) a unit of account.

Economics

What is the effect of a higher price level on planned spending?

a. People are less willing to spend at each income level. b. It makes stocks and bonds more attractive. c. Consumers purchases more number of durable goods. d. Imports of a nation fall and exports rise leading to an increase in net exports.

Economics

Other things being equal, the lower the value of elasticity:

A. the more likely the profitability of a price increase. B. the less likely the profitability of a price increase. C. the greater the responsiveness in quantity demanded to a price change. D. the lower the corresponding increase in firm revenue.

Economics