In a contestable market
A) the HHI is usually quite low.
B) the firm in the market usually earns a large economic profit.
C) the firm in the market may play an entry-deterrence game.
D) there are high barriers to entry.
C
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Bill is an economics professor who earns $37,000 teaching but decides to leave and fulfill his dream of catering barbecues. During his year of barbecuing he earned total revenue of $60,000. He spent $30,000 on food and supplies
He also paid his wife $10,000 to help serve food. The normal profit for an entrepreneur running a barbecue business is $3,000. Bill also rented an industrial grill/fry truck for $12,000. Bill had an economic A) profit of $20,000. B) loss of -$32,000. C) loss of -$42,000. D) profit of $28,000. E) profit of zero.
In calculating income for the Lorenz curve, one factor that is omitted, is
A) capital gains income. B) dividend payments. C) in-kind transfer payments from the government. D) pure economic rent.