Explain what a "perfectly contestable" market means. Give an example of a perfectly contestable market. Explain why the outcome in a perfectly contestable market is that firms produce efficiently.

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The Answer is A perfectly contestable market is a market in which entry and exit are costless. An example of a perfectly contestable market is the market for trucking services. The firms are forced to behave efficiently because of the threat of competition.

Explain What a "Perfectly Contestable" Market Means