A market with a single firm but no barriers to entry is known as
A)a natural monopoly.
B)a contestable market.
C)a perfectly competitive market.
D)monopolistic competition.
E)an oligopoly.

Question

Quizplus · Accepted Answer

A contestable market is a market with a single firm, but where there are no barriers to entry or exit, meaning that potential competitors can enter and exit the market freely. This can lead to competition and market dynamics similar to those found in a perfectly competitive market, despite the presence of a single firm. A natural monopoly would involve high barriers to entry, while monopolistic competition and oligopoly involve multiple firms competing in the market.

A Market with a Single Firm but No Barriers to Entry