Marty's Seafood Company sells fish in a perfectly competitive market. The market price is currently $3 per pound. At its current level of production, long-run average cost at Marty's Seafood Company is $2.75 per pound
If Marty's Seafood Company is representative of firms in the industry, is this industry in equilibrium? Explain.
No, the industry is not in equilibrium. In long-run equilibrium, price is equal to short-run marginal cost, short-run average cost, and long-run average cost. Firms in this industry are earning positive profits and new firms can be expected to enter the industry. This will lower the price of fish driving profit to zero.
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Given this information, which of the two banks is more prone to bank runs and why?
A country could correct a balance-of-payments surplus by
A. Expansionary fiscal policy. B. Contractionary monetary policy. C. Increasing tariffs on imported goods. D. Decreasing the money supply.
An economy has two workers, Paula and Ricardo. Every day they work, Paula can produce 4 computers or 16 shirts, and Ricardo can produce 6 computers or 12 shirts. To maximize total output, Paula should specialize in producing ________ while Ricardo should specialize in producing ________.
A. shirts; shirts B. computers; shirts C. shirts; computers D. computers; computers
A rational person maximizes
A) risk. B) return. C) expected utility. D) return variance.