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Describe contestability in transport market and describe barrier to entry and there application to the transport market.



Generally if transport market is contestability, there is low barrier to entry.

for example the market of road haulage, couch services and rural bus services are get high con testability,therefore there are low barrier to entry. In the opposite, the air transport market has low contestability therefore it is high barrier to entry.

In monopoly market, there is high barrier to entry, because if a new business want to entry the set up cost is high, also there is some legal barriers for example the new transport market should have the licence from government.etc Thus in monopoly market there is low contestability.



In oligopoly market, the is lower barrier to entry than monopoly because a oligopoly market is a market dominated by a few larger firms. Therefore there is low contestablility as well.

However in a contestable market and a perfect competition market there is high contestability.

Because a contestable market is a market where is no barrier to entry and exit and the costs facing incumbent and few firms are equal.Also the meaning of perfect competition is a market structure with many buyers and sellers, free entry and exit an identical product. So according to the definition of both market it reflect both of them are no barrier to entry , therefore there are high contestability.



Outline the natrual monopoly case for transport

A natrual monopoly is a market situation where a monopo;osthas overwhelming cost advantage.

The natrual monopoly case for transport such as water, gas and electricity. For example there are two bus companies in a transport market, but both of them find put there is low profitability, but the bus company which exit in this market already will win the competition perhaps, because if there is already a bus company occur, the scale of this company is big, so the new entry bus company has low ability to get this conpetition so it will be difficuilt to entry real market. However if this new bus company has another transport market already and run it very well, it might be survive in this kind of competition.