What term describes a market where a monopolist cannot raise price above long run average cost?
A)Blockaded
B)Perfectly contestable
C)Accommodated
D)Deterred
E)Predatory

Question

Quizplus · Accepted Answer

A market that is perfectly contestable is one where there are no barriers to entry or exit, meaning that new firms can easily enter the market to compete with existing firms. In such a market, a monopolist cannot raise prices above the long run average cost because they risk being undercut by new entrants who are able to produce at a lower cost. This makes the market highly competitive, resulting in efficient outcomes for consumers.

What Term Describes a Market Where a Monopolist Cannot Raise