The marginal cost of producing fish increases by $.01 with each additional fish. The marginal cost of the first fish is $.01, for the second it is $.02, etc. If the market price for fish is $7 per fish and your total fixed cost is $7,000 . you should
a. stop fishing after the 7,000th fish
b. stop fishing after the 700th fish
c. stop fishing after the 1,000th fish
d. shut down
e. there is not enough information to answer this question
E
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Suppose there are 1000 identical wheat farmers. For each, TC = 10 + q2 Derive the market supply curve
What will be an ideal response?
When water cannot be traded among current and potential users, then
a. each user will take more care to conserve, because added water cannot be obtained. b. users have a strong incentive to conserve because they are now protected from price increases imposed by greedy entrepreneurs. c. efficiency improves, as dry years can be better anticipated and planned for, and every user knows the quantity that will be available. d. water will not flow to its highest valued uses, and some users will use water for relatively low-valued uses, because they cannot gain by selling it to others.