In the Problem Discussed in Your Workbook, the Cost of Capturing

question 25

Multiple Choice

In the problem discussed in your workbook, the cost of capturing a cockatoo and transporting him to the United States is about $40 per bird.Cockatoos are drugged and smuggled in suitcases to the United States.Half of the smuggled cockatoos die in transit.Each smuggled cockatoo has a 10% probability of being discovered, in which case the smuggler is fined.If the fine imposed for each smuggled cockatoo is increased to $1,200, then the equilibrium price of cockatoos in the United States will be

• A)$100.
• B)$160.
• C)$76.
• D)$355.56.
• E)$266.67.

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Definitions:

Earnings Per Share

A measure of a company's profitability that calculates the amount of net income earned for each share of its common stock.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues, indicating financial performance over a period.

Company Sizes

A categorization or measurement of a business based on its scale, which can be determined by various metrics such as revenue, assets, or number of employees.

Stockholders' Equity

The residual interest in the assets of an entity that remains after deducting its liabilities; equity represents ownership interest in a company.