If an oligopoly market is contestable and new firms enter, the
A. Number of firms in the industry will decrease.
B. Market power of the former oligopolists will be reduced.
C. Profitability of the industry will increase.
D. Former oligopolists will raise their prices.
Answer: B
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Diseconomies of scale is
A) a short-run phenomenon. B) the result of decreasing marginal returns. C) a long-run phenomenon. D) the result of increasing marginal returns. E) possible only when the firm's plant size is fixed.
M1 does not include cash that is held in ATMs or bank vaults, because ________
A) no one really owns that money B) that money is included in M2 C) that money earns no interest D) the right to access that money is counted already as bank deposits E) none of the above
Which of the following indicates when Stage I ends and Stage II begins in the short-run production?
A) when AP = 0 B) when MP = 0 C) when MP = AP D) when MP starts to diminish
The demand curve for petroleum should be
A) more elastic in the long run than in the short run. B) less elastic in the long run than in the short run. C) as elastic in the long run as it is in the short run. D) more or less elastic in the long run versus the short run depending upon supply conditions.