Economics (AS & A Level) · May / June 2024 · Paper 31 · Question 7
9708Different market structures
Which assumption is essential for a market to be contestable?
- AThe market is supplied by a large number of firms.
- BFirms are free to enter and leave the market.
- CFirms cannot earn abnormal profits in the short run.
- DFirms produce differentiated goods.
As printed in the paper
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Correct answer: B. Firms are free to enter and leave the market.
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