The relevant market structure under deregulation is described by a theory which
Substitutes potential competition for the active participation of many sellers.What is this theory called?
A) the law of supply and demand
B) marginal utility
C) monopolistic competition
D) contestable markets

Question

Quizplus · Accepted Answer

The theory described in the question is known as "contestable markets." This theory proposes that even in the absence of many active sellers, the threat of potential competition can effectively discipline the behavior of a single dominant firm. This can lead to outcomes similar to those observed in highly competitive, perfectly contestable markets, even where there are few actual competitors.

The Relevant Market Structure Under Deregulation Is Described by a Theory