In ________ markets, large oligopolistic firms end up behaving like perfectly competitive firms.
A) monopolistically competitive
B) monopoly
C) contestable
D) blocked

Question

Quizplus · Accepted Answer

In contestable markets, the threat of potential entry by new competitors can lead to large oligopolistic firms behaving as if they were in a perfectly competitive market, setting prices and output as if they faced competition, even if they do not currently. This is because the ease of entry and exit for firms in a contestable market forces existing firms to be efficient and price competitively to deter new entrants.

In ________ Markets, Large Oligopolistic Firms End Up Behaving Like