Question

In the case of software, contestability is often hampered by:

A) low fixed costs of development.

B) low variable costs of distribution.

C) high variable costs of distribution.

D) high fixed costs of development.

Answer 1

Solution:-Option D is correct

D. high fixed costs of development.

Explaination:-In the case of software, contestability is often hampered by high fixed costs of development.It is the best example of Competition Is “For the Market” Instead of “In the Market.Competition for the market may be desirable when competition in the market is infeasible or impractical.An efficient auction achieves cost efficiency because the most efficient firm is the firm that can afford to pay the highest price for the right to be the monopoly. In paying this high price, the successful bidder gives up at least some portion of its monopoly profits.