In the case of software, contestability is often hampered by:
A) low fixed costs of development.
B) low variable costs of distribution.
C) high variable costs of distribution.
D) high fixed costs of development.

Question

Quizplus · Accepted Answer

High fixed costs of development can create significant barriers to entry for new competitors in the software industry, making it less contestable. Existing firms with established products and a large customer base have a substantial advantage, and potential entrants may struggle to compete with the high development costs required to create a competing software product from scratch.

In the Case of Software, Contestability Is Often Hampered By