A market is contestable if
a. the number of firms is larger than oligopoly.
b. firms spend a lot on advertising.
c. there is free entry and exit.
d. firms have kinked demand curves.
c
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In the monetary small open-economy model with a flexible exchange rate, an increase in the world real interest rate
A) increases domestic output and increases the nominal exchange rate, as long as real money demand is much more responsive to real income than to the real interest rate. B) increases domestic output and decreases the nominal exchange rate, as long as real money demand is much more responsive to real income than to the real interest rate. C) decreases domestic output and increases the nominal exchange rate, as long as real money demand is much more responsive to real income than to the real interest rate. D) decreases domestic output and decreases the nominal exchange rate, as long as real money demand is much more responsive to real income than to the real interest rate.
How are discouraged workers counted in the unemployment rate?
If an economy produces 1,000 units of output with a price level of $1 and the money supply (M) is $500, velocity is:
A. 2. B. 5. C. 50. D. 500.
The price of A falls by 2 percent, and the quantity demanded of A increases by 2 percent. Meanwhile, the quantity demanded of B increases by 2 percent too. We would conclude that
A) demand for A is elastic, and A and B are substitutes. B) demand for A is elastic, and A and B are complements. C) demand for A is unit-elastic, and A and B are complements. D) demand for A is inelastic, and A and B are unrelated.