In economics, the theory of contestable markets, associated primarily with its 1982 proponent William J. Baumol, held that there are markets served by a small number of firms that are nevertheless characterized by competitive equilibrium because of the existence of potential short-term entrants.

What does it mean if something is contestable?

A contestable statement, claim, legal decision, etc. is one that is possible to argue about or try to have changed because it may be wrong: ... A contestable market is one that it is fairly easy for new companies to enter.

What does contestable mean in economics?

Contestable in economics means that a company can be challenged or contested by rival companies looking to enter the industry or market. ... Characteristics of a contestable market include: There are no barriers to entry or exit barriers.