A market in which firms can enter if they choose and exit without losing money invested is
A)pure monopoly.
B)duopoly.
C)contestable.
D)a market where there are kinked demand curves.

Question

Quizplus · Accepted Answer

A contestable market is a market where there are low barriers to entry and exit. This means that firms can enter and exit without incurring high costs. In such a market, firms are forced to compete with each other to offer the best quality and lowest prices to consumers. This competition ensures that firms do not earn excess profits, as new firms can always enter the market and offer similar products or services. Therefore, a contestable market is characterised by dynamic efficiency, where firms are incentivised to innovate and improve their products or services to remain competitive.

A Market in Which Firms Can Enter If They Choose