Question on Contestability: ‘How can you tell if it is contestable or competitive?’

A student asked me a good question a couple of days ago, the question was, roughly:  ‘How can you tell if a firm is keeping prices low because it is a contestable market or because it is actually already facing competition.’ I asked her to explain and she pointed to an example where she lives. On her… Continue reading Question on Contestability: ‘How can you tell if it is contestable or competitive?’