easyJet
Although this question appeared on the ‘Transport economics’ module within the OCR specification, these are concepts that are important in other A2 modules that deal with market structure. Contestability is an important concept in discussions about market structure, because it affects the way that firms behave, and influences their decisions on price. This in turn influences the effectiveness of the market in delivering efficiency. This will be explained more clearly in the discussions below.
(a) Explain the relationship between contestability and efficiency within a market. (10 marks)
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