Which of the following is not a condition of a contestable market?
A)There is easy entry into the market.
B)There is costless exit from the market.
C)New firms entering the market can produce the product at lower cost than current firms.
D)Firms exiting the market can easily dispose of their fixed assets by selling them elsewhere.
E)None of the above; that is, all of the above are conditions of a contestable market.

Question

Quizplus · Accepted Answer

A contestable market is characterized by the ease of entry and exit, not by new firms being able to produce at a lower cost than existing firms.

Which of the Following Is Not a Condition of a Contestable