Suppose a fishing boat currently brings 10,000 fish to market and earns a profit of $40,000 when the price of fish is $8 . Suppose the boat dealer had overcharged the boat owner for the boat. Upon receiving a refund of $25,000 from the dealer, what will happen to the AVC of producing 10,000 fish?
a. increases by $25
b. increases by $2.50
c. does not change
d. decreases by $2.50
e. decreases by $25
C
Economics
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