In a contestable market,
A) there is always price discrimination.
B) there are high barriers to entry.
C) the firm in the market usually earns a large economic profit.
D) the firm in the market may play an entry- deterrence game.

Question

Quizplus · Accepted Answer

In a contestable market, firms may engage in strategies such as entry-deterrence games to prevent new competitors from entering the market, despite the absence of significant barriers to entry. This is because the threat of potential competition influences their behavior.

In a Contestable Market