Multiple Choice
Suppose an insurance company determines that the average annual malpractice cost is $10,000 for reckless lawyers and $500 for careful lawyers. If 10% of the lawyers insured by the company are reckless, the company will earn zero economic profit if the price of insurance is
A) $500.
B) $1,450.
C) $5,250.
D) $10,000.
Correct Answer:
Verified
Correct Answer:
Verified
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