A contestable market is

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A contestable market is an imperfectly competitive situation that is subject to entry by new firms. The possibility of entry has a disciplining effect on the behavior of existing firms, making the market more competitive even if there are only a few firms operating in it. This is different from a perfectly competitive market in which there are many firms producing identical products and no barriers to entry, and from an imperfectly competitive situation with high barriers to entry, in which existing firms have market power and are protected from potential competition.

A Contestable Market Is