Ownership of key natural resources presents a barrier to entry
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A contestable market is one where the potential threat of entry by new firms causes producers in the industry to operate as if they were in a competitive market.
The first part of an A-level essay question on this topic often focuses on an aspect of imperfect competition, such as the sources of monopoly power. The second part might ask you to evaluate policies to prevent imperfectly competitive firms from reducing overall welfare, such as increasing market contestability.
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