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The Revolution in Monopoly Theory was a name given to the idea that emerged in the early 1980s, from the work of William Baumol and others that monopolistic players in contestable markets would be acting in their best interests by being as competitive as possible. General reluctance and hostility to monopoly powers had, until the early 1980s, been theoretically driven by public concern over the ability for monopolistic firms to hold consumers and potential competitors to ransom through market power.

It is said then, that when an idealised contestable market exists, the number of firms participating in the industry is irrelevant. Those companies, even monopolistic ones are forced to act almost like they were in a perfectly competitive environment. This idea of an “idealised contestable market” was however limited by one crucially pivotal characteristic; that there is ease of entry and exit to the market.

References The revolution in monopoly theory, by Glyn Davies and John Davies. Lloyds Bank Review, July 1984, no. 153, p. 38-52.

The Revolution in Monopoly Theory was a name given to the idea that emerged in the early 1980s, from the work of William Baumol and others that monopolistic players in contestable markets would be acting in their best interests by being as competitive as possible. General reluctance and hostility to monopoly powers had, until the early 1980s, been theoretically driven by public concern over the ability for monopolistic firms to hold consumers and potential competitors to ransom through market power.

It is said then, that when an idealised contestable market exists, the number of firms participating in the industry is irrelevant. Those companies, even monopolistic ones are forced to act almost like they were in a perfectly competitive environment. This idea of an “idealised contestable market” was however limited by one crucially pivotal characteristic; that there is ease of entry and exit to the market.

References The revolution in monopoly theory, by Glyn Davies and John Davies. Lloyds Bank Review, July 1984, no. 153, p. 38-52.

Revolution in monopoly theory - Wikipedia, the free encyclopedia
The Revolution in Monopoly Theory was a name given to the idea that emerged in the early 1980s, from the work of William Baumol and others that monopolistic players in contestable ...

Monopoly - Wikipedia, the free encyclopedia
... same good, or a substitute, at a lower price. [4] The idea that monopolies in markets with easy entry need not be regulated against is known as the "revolution in monopoly theory" [5.

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