Kevin Is a Bricklayer in Melbourne

question 49

Essay

Kevin is a bricklayer in Melbourne.Bricklaying is a fiercely competitive industry with many small suppliers all offering similar products.Fortunately for Kevin he is one of the best bricklayers in the business, in fact, in one hour Kevin can lay twice as many bricks as any other bricklayer in town, which helps him keep his costs down.Suppose the market is initially at a competitive equilibrium.After a particularly inspiring season of The Block, there is a permanent increase in demand for home renovations.Following the increase in demand, is it possible for Kevin and the other bricklayers to make economic profit in the short-run? How about in the long-run? Explain.

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Definitions:

Intuition

Intuition involves understanding or knowing something instinctively, without the need for conscious reasoning.

Algorithms

A set of rules or procedures to be followed in calculations or problem-solving operations, often used by computers.

Overconfidence

A cognitive bias that causes someone to overestimate their abilities, performance, the level of control they have, or their level of knowledge.

Divergent Thinking

An approach or process designed for the creation of inventive ideas through the investigation of various available alternatives.