Attempts $$ Keep the Highest $1/2$

$4.$ Contestable markets

True or False: If a firm is operating in a contestable market, it should operate at the efficient production level and earn a zero profit.

True

False

The contestable market model has important policy implications. If there is concern that a market is not sufficiently competitive, what can policymakers do to increase competition in a given industry? Check all that apply.

Increase entry barriers

Decrease entry barriers

Increase regulations