As long as a market is contestable, then even if it has only a few sellers, the
a. threat of new entrants will prevent the prices from rising above the competitive level.
b. producers will be able to charge prices that are high enough to produce long-run economic profits.
c. producers will not face new competition because the barriers to entry are high.
d. market will never be expected to come close to the competitive result.
A
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An information cascade occurs when:
A) the buyer of a good has more information than the seller and takes hidden actions. B) the seller of a good has more information about the hidden characteristics of the good. C) people make the same decisions as others without focusing on private information. D) people have contradictory information about a good they want to consume.
Refer to Figure 15-17. The dean of the college argues: "I think the course should be priced to maximize the profit the college earns, so these funds can be used to pay some other expenses " How much profit (or loss) will the college make on the course if it charges this price?
A) -$2,592,000 B) -$1,080,000 C) $0 D) $450,000
Political incumbents often gain or lose re-election because of a strong or weak economy. Which of the following is an exception to that rule?
A) Al Gore B) George H.W. Bush C) Jimmy Carter D) Herbert Hoover
Which of the following would be considered a contingent? contract?
A) a piece rate contract B) a profit-sharing contract C) a contact with a bonus D) All of the above.