According to the contestable market model, if there are no barriers to entry or exit, the price an oligopolist sets will be equivalent to average total cost.
Answer the following statement true (T) or false (F)
True
If a market is contestable, an oligopolist will set a price that discourages entry by other firms.
You might also like to view...
Which of the following is an example of a supply shock?
A) a surprise increase of the money supply B) an increase in the price level C) a sharp increase in the price of oil D) an increase in government spending
Under a fixed exchange rate system, if the real interest rate is at its lower bound and the central bank implements expansionary policy, real GDP will ________ and the output gap will ________
A) increase; increase B) decrease; decrease C) increase; decrease D) not change; not change
In the United States, which institution is primarily responsible for inspecting credit unions?
a. Federal Reserve b. Office of the Comptroller of the Currency c. National Credit Union Administration d. Federal Deposit Insurance Corporation
For most industries, average costs decrease indefinitely as output expands
a. True b. False Indicate whether the statement is true or false