Contestability - A2 OCR Economics Quiz 2.5 / 5 based on 3 ratings ? EconomicsCompetitive marketsA2/A-levelOCR Created by: JadeCreated 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
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