Contestability - A2 OCR Economics Quiz

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  • Created by: Jade
  • Created on: 09-12-12 13:25
What is contestability?
Contestability is the extent to which barriers to entry and exit in a market are free and costless
1 of 10
A market is contestable if potential competitors can influence the?
Conduct of incumbent firms
2 of 10
The fewer barriers to entry, and the lower cost to entry, the ___ contestable the market will be.
More
3 of 10
Cost of exit must also be costless. This means that in a perfectly contestable market, firms will have?
No sunk costs
4 of 10
What is 'hit-and-run entry'?
The way in which a firm enters a market where abnormal profits are being earned and leaves when profits return to normal
5 of 10
The market will not be at all contestable...
Monopoly power is obtained through a patent or legal right
6 of 10
The number of firms in a market does not matter
Perfectly contestable market
7 of 10
In which industry are there high barriers to entry and low contestability?
Rail passenger services and rail freight
8 of 10
In which industry are there medium barriers to entry and medium contestability?
Franchised bus services
9 of 10
In which industry are there low barriers to entry and high contestability?
Rural bus services
10 of 10

Other cards in this set

Card 2

Front

A market is contestable if potential competitors can influence the?

Back

Conduct of incumbent firms

Card 3

Front

The fewer barriers to entry, and the lower cost to entry, the ___ contestable the market will be.

Back

Preview of the front of card 3

Card 4

Front

Cost of exit must also be costless. This means that in a perfectly contestable market, firms will have?

Back

Preview of the front of card 4

Card 5

Front

What is 'hit-and-run entry'?

Back

Preview of the front of card 5
View more cards

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