Week 11 Flashcards
1
Q
what does the theory of contestability explain
A
2
Q
natural barriers to entry examples
A
3
Q
artificial barriers to entry
A
firms try and create to make it difficult for other firms to enter
4
Q
Hit and run competition
A
5
Q
how do you prevent hit and run competition
A
6
Q
sunk costs definition and examples
A
7
Q
what are the 3 factors needed for a market to be contestable
A
8
Q
what profit does firms in a contestable market make in the LR
A
9
Q
in a contestable market firms in the LR will be …
A
10
Q
contestable market graphically being productively efficient
A
the new firm has to either leave the market or become productively efficient so that it can compete
11
Q
contestable market graphically being allocatively efficient
A
P=MC is allocatively efficient
12
Q
contestability re cap
A
