Which of the following is true of a contestable market?
A)Competitors act like monopolists.
B)Competitors act like consumers.
C)Monopolists act like competitors.
D)Monopolists act like consumers.
E)Firms are controlled by the government.

Question

Quizplus · Accepted Answer

In a contestable market, monopolists are forced to act like competitors due to the threat of potential entry by new firms, which can lead to competitive pricing and behavior even in the absence of actual competition.

Which of the Following Is True of a Contestable Market