Contestable Markets and Limit Pricing Explained I 60 Second Economics
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YouTubetutor2u
Contestable Markets and Limit Pricing Explained I 60 Second Economics
A contestable market is one where barriers to entry and exit are low, meaning even firms with a large market share face the constant threat of “hit-and-run” competition. In this environment, incumbents may abandon short-run profit maximisation and instead set a limit price - a lower price designed to deter new entrants. By pricing closer to ...
2.4K views2 days ago
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