run characteristics of an oligopolistic industry In general we expect profits made byexisting firms to lead new firms to enter the industry Such entry will in turn reduceprofits toward their comp ID: 485296
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Oligopoly and contestable markets run characteristics of an oligopolistic industry. In general, we expect profits made byexisting firms to lead new firms to enter the industry. Such entry will, in turn, reduceprofits toward their competitive level. Here we present a theory that emphasizes not ragan_econ_11ce_Ch11b_topic 3/24/04 1:42 PM Page 1 point that the possibility of entry is the major force preventing the exploitation of mar-costs of entry, the less contestable the market, and the higher the profits that existing firmscan earn without attracting entry. Current evidence suggests that a high degree of con-Oligopoly and contestable markets ragan_econ_11ce_Ch11b_topic 3/24/04 1:42 PM Page 2