Contestable markets

Start with the key ideas

Begin with a “Contestable Markets” flashcard deck. One deck asks about assumptions, sunk costs and hit-and-run entry. Work through its prompts, then use a “Contestable Markets” mind map to see how the ideas fit together. The maps include definitions and points about access to production techniques, advertising to customers, and entry and exit barriers.

The page also lists “Contestable Markets” notes on low barriers and competition from new suppliers. These offer another way to study the relationship between new entrants and established businesses.

Compare the resources

After the introductory ideas, try the other “Contestable Markets” flashcard deck. Its questions cover characteristics of a contestable market, comparisons to a monopoly, and advantages held by incumbents. Use those prompts to check which points you can explain in your own words.

For business behavior, look at the mind map on the likely effects of an increase in contestability. It includes barriers to entry, pricing, non-price competition and efficiency. Compare those branches with the entry and exit ideas in the other maps.

Use questions and maps together

There are no quizzes listed on this page, but you can turn the flashcard prompts into your own quiz. Use a mind map to organize the points before you answer, then return to it to check the connections you missed. You could also add your own branches as you study.

Place the topic in its unit

Contestable markets is a section of the Market Structures unit in Economics. The slides on contestable and non-contestable markets offer another view of competition and barriers. Use them alongside the notes and maps as you work through this section of the unit. Choose a resource and explore it in the order that works for you.