If marginal profit is zero, then average profit is at a maximum.

If the relative market price of producing cotton is more than the opportunity cost of producing it in the South,

(a) the market price of cotton will fall in the long run. (b) producers will increase the supply of cotton in the long run. (c) resources will flow away from the production of cotton, causing the supply of it to decline with the passage of time. (d) the situation will remain unchanged as long as supply and demand remain in balance.

Incentives are not likely to be a problem if:

A. all actions are observable. B. actions are not observable. C. workers' efforts are not contractible. D. only some actions are observable.