1.5.9 Contestable and non-contestable markets (A-level only)
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Potential competition matters

Potential competition matters

Side-by-side schematic comparing a contestable market with easy entry and exit against a non-contestable market with blocked entry, difficult exit and high sunk costs

Contestability asks whether a rival could enter and leave cheaply, not just how many firms operate now. That is why even a market with one incumbent can behave competitively if entry is credible.

1.5.9 Contestable and non-contestable markets (A-level only) Lesson

  1. A Level
  2. /Economics
  3. /1.5.9 Contestable and non-contestable markets (A-level only)