In the extreme case of a perfectly contestable market

Name: In the extreme case of a perfectly contestable market
Brand: Quizplus
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Quizplus · Accepted Answer

In the extreme case of a perfectly contestable market, there are no barriers to entry or exit, and firms are forced to operate at a level that just covers their costs (i.e., normal profit), as any excess profits would attract potential entrants. Hence, profits will be zero in a perfectly contestable market.

In the Extreme Case of a Perfectly Contestable Market