In a sequential contestable market game
A) a small number of firms can behave like firms in perfect competition.
B) the outcome is always a monopoly equilibrium.
C) the dominant firm always makes a monopoly profit, while other firms make zero economic profits.
D) a firm that enters the market first is protected from potential entrants by natural barriers.

Question

Quizplus · Accepted Answer

In a sequential contestable market game, even a small number of firms can behave like firms in perfect competition due to the threat of potential entry, leading to competitive outcomes.

In a Sequential Contestable Market Game