In perfectly contestable markets,large oligopolistic firms end up pricing like

Question

Quizplus · Accepted Answer

In perfectly contestable markets, there are no barriers to entry and exit, and firms can freely enter and exit the market. This means that if large oligopolistic firms try to set high prices, new firms will enter the market and compete with them, forcing them to lower their prices to remain competitive. As a result, the pricing behavior of large oligopolistic firms in perfectly contestable markets resembles that of competitive firms. Hence, the correct answer is C) competitive firms.

In Perfectly Contestable Markets,large Oligopolistic Firms End Up Pricing Like