A Lorenz Curve That Is Perfectly Straight Indicates

question 120

Multiple Choice

A Lorenz curve that is perfectly straight indicates

• A) that society is very rich.
• B) that a small portion of the population accounts for most of the income.
• C) that a large portion of the population accounts for most of the income.
• D) complete income equality.

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Definitions:

Perfectly Competitive Industries

Markets where there are many buyers and sellers, products are homogeneous, and no single entity has the ability to influence prices.

Quantity Of Output

The total amount of goods or services produced by an individual, firm, industry, or entire economy in a given period.

Price To Charge

Price to Charge refers to the amount a business decides to set for its product or service, taking into account costs, competitive prices, and profit margins.

Marginal Costs

The additional cost incurred by producing one additional unit of a product or service.