When the market for a network good is contestable,:
A) there is little competition.
B) many firms operate and compete for consumers in the industry.
C) it is hard for consumers to get locked into a "bad" outcome.
D) monopoly firms always charge prices well above their average costs.

Question

Quizplus · Accepted Answer

In a contestable market, the threat of potential competition ensures that firms behave competitively, making it difficult for consumers to get locked into a "bad" outcome.

When the Market for a Network Good Is Contestable