My Friend and I Both Bank at the Same Local

question 59

Essay

My friend and I both bank at the same local bank in the United States.My friend is spreading a rumor that bank executives have made mistakes and that the bank is about to fail.My friend is even invited to go on national television to make the case that the bank is about to fail.Even if I know this rumor is false,why might I do nothing to prevent a bank run and publicly refute my friend's claims?

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Definitions:

Marginal Cost

The increase in total cost that arises from an extra unit of production.

Total Revenues

Total Revenues refer to the total receipts from sales of goods or services by a company before any expenses are subtracted.

Fixed Costs

These stay the same no matter how much output changes.

Marginal Cost

The additional cost incurred in the production of one more unit of a good or service.