Day: November 20, 2022

A firm operates in a contestable market.

Which statement correctly describes the firm’s conduct?

Select ONE answer:

1. It will set a price to maximise profits in the short run.
2. It will set a price to maximise its revenue.
3. It will set a price to deter the entry of new firms.
4. It will produce at minimum average cost.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.