contestable market

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contestable market

a MARKET where new entrants face costs similar to those of established firms and where, on leaving, firms are able to recoup their capital costs, less depreciation. Consequently, it is not possible for established firms to earn ABOVE NORMAL PROFIT as this will be eroded by the entry of new firms, or, alternatively, the mere threat of such new entry may be sufficient to ensure that established firms set prices that yield them only a NORMAL PROFIT return. Perfectly competitive markets (see PERFECT COMPETITION) are all contestable, but even some oligopolistic markets (see OLIGOPOLY) may be contestable if entry and exit are easily affected.

In recent times many markets have been opened up by a number of developments, including increasing international competition as trade barriers have been reduced, the introduction of FLEXIBLE MANUFACTURING SYSTEMS and ECOMMERCE trading on the INTERNET. See WORKABLE COMPETITION, CONDITION OF ENTRY, BARRIERS TO ENTRY, BARRIERS TO EXIT.

References in periodicals archive ?
The contestability of social capital networks as a whole is another important means to reducing abuse.
This process is going on in many sectors right now and what's important to be aware of is that, where the innovation process is limited by the selection of which firms are going to compete, it will also lead to a reduction in the space for experimentation and contestability generally and, to me, this explains the paradox that there are a lot of exciting new technologies developed but we can't actually see the effect in any type of economic statistics.
Contestability theory, emphasising potential, rather than actual competition, informed policy from 1988, when the Industries Assistance Commission (1988) argued for deregulation of wheat exports, to 2008, when the Rudd government's policy shift was implemented.
For this reason, it is imperative that a whistleblower's right of contestability be protected from any form or even appearance of retaliation.
Port, contestability, North America, shipping alliance, liner shipping, shipping capacity
My overall orientation is constructivist, and on this basis I shall explain the idea of a "contestability differential" which I find particularly helpful for understanding inscription devices.
This is reportedly a part of the Singapore Energy Market Authority's retail contestability programme.
Essential contestability as a technical term was introduced into epistemology and consequently into political philosophy by W.
This kind of weirdness could drive every dispute the industry has ever had in relation to contestability, pre-existing conditions, exclusions and even the hassles of underwriting.
In developing the contestability approach, William Baumol and others stressed that there is no tradeoff between economies of scale and competitiveness of industries.
A new historiography should recover the diversity, contingency, and contestability of socialist ideas and the movements they inspired" (313).