What is meant by the Coase conjecture?
A) Firms in perfectly competitive markets are unable to retain their competitive advantage since products are homogeneous.
B) A monopoly that sells durable goods competes with itself and so is no longer a monopoly.
C) Firms in perfectly competitive markets are unable to cover their high ?xed costs.
D) A monopoly ?nds it di?cult to sustain its supernormal pro?ts as there are no barriers to

Question

Quizplus · Accepted Answer

The Coase conjecture suggests that a monopolist selling durable goods faces competition from its future sales, effectively eroding its monopoly power because consumers may wait for future price drops rather than purchasing immediately.

What Is Meant by the Coase Conjecture