Question

The relevant market structure under deregulation is described by a theory which

substitutes potential competition for the active participation of many sellers. What is this theory called?
a. the law of supply and demand
b. marginal utility
c. monopolistic competition
d. contestable markets

Answer 1

d. contestable markets

Step-by-step explanation:

Hello! The theory of contestable markets says that a market may be vulnerable to competitive forces even if it is characterized by a monopoly or oligopolistic situation. These markets are those in which the short-term threats of potential competitors exert such a high level of pressure on established companies that their compartment is conditioned.