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In a Market That Is Contestable, but Has Only a Few

Question 176

Multiple Choice

In a market that is contestable, but has only a few sellers, the


A) threat of new entrants will prevent prices from rising above the competitive level.
B) producers will be able to charge prices that are high enough to produce long-run economic profits.
C) producers will not face new competition because the barriers to entry are high.
D) market will never be expected to come close to the competitive result.

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