Suppose an Industry Has One or Two Successful Franchises and There

question 6

Multiple Choice

Suppose an industry has one or two successful franchises and there is a government policy which limits the number of firms in the industry.What is the likely result?

• A)Consumer choice will be maximized.
• B)Productive efficiency will be achieved by most firms.
• C)Entry by new firms will be easy.
• D)The existing franchises can be sold for a price that reflects the economic profits that are being earned by the existing firms.
• E)Most existing firms will be earning normal profits only.

Understand the concept of moral hazard in insurance.

Know the process and significance of document exchanges in insurance, including policy issuance and premium payments.

Acknowledge the establishment and maintenance of insurance agreements, including grace periods and temporary coverages.

Understand the fundamental principles of insurance, including risk, premiums, and the importance of insurable interest.

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Definitions:

Qualified Education Expenses

are costs related to education, like tuition and fees, required for enrollment or attendance at an eligible educational institution.

Tax-Free

Tax-free refers to certain financial products or transactions that are not subject to tax by the government, such as certain municipal bonds or qualified withdrawals from a Roth IRA.

Single Life Annuity

An insurance product that provides a retiree with regular payments for the rest of their life, with no survivor benefits after their death.

Tax-Free Amount

The portion of income or a financial distribution that is not subject to taxation by authorities.