Contestability Flashcards
1
Q
What is a contestable market?
A
type of market structure that is competitive because of a lack of a lack of barriers to entry
2
Q
What is limit pricing?
A
pricing strategy that is used to discourage entry into the market
3
Q
What are sunk costs?
A
costs that the firm cannot recover if it were to exit the market
4
Q
Give 2 examples of sunk costs
A
advertising expenditure
loss or reputation
