Sebastian decides to open a tree farm. When deciding to open his own business, he turned down two separate job offers of $25,000 and $30,000 and withdrew $20,000 from his savings. Sebastian's savings account paid 3 percent interest. He also borrowed $20,000 from his brother, whom he pays 2 percent interest per year. He spent $15,000 to purchase supplies and earned $50,000 in revenue during his
first year. Which of the following statements is correct?
a. Sebastian's economic profit is $4,000 . and his accounting profit is $34,600 .
b. Sebastian's economic profit is $4,600, and his accounting profit is $35,000.
c. Sebastian's economic profit is -$16,000 . and his accounting profit is $34,600.
d. Sebastian's economic profit is -$16,000 . and his accounting profit is $14,600.
a
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________ are financial intermediaries that acquire funds by selling shares to many individuals and using the proceeds to purchase diversified portfolios of stocks and bonds
A) Mutual funds B) Investment banks C) Finance companies D) Credit unions
Firms faced with prisoners' dilemma can always make more profits by engaging in opportunistic behavior. Why is this type of behavior NOT commonly found even in oligopolistic markets?
What will be an ideal response?