Suppose That in Horsehead, Massachusetts, the Cost of Operating a Lobster

question 10

Multiple Choice

Suppose that in Horsehead, Massachusetts, the cost of operating a lobster boat is $6,000 per month.Suppose that if x lobster boats operate in the bay, the total monthly revenue from lobster boats in the bay is $1,000(18x - x²) .If there are no restrictions on entry and new boats come into the bay until there is no profit to be made by a new entrant, then the number of boats who enter will be X₁.If the number of boats that operate in the bay is regulated to maximize total profits, the number of boats in the bay will be X₂.

• A)X₁ = 6 and X₂ = 4.
• B)X₁ = 12 and X₂ = 6.
• C)X₁ = 16 and X₂ = 10.
• D)X₁ = 12 and X₂ = 12.
• E)None of the above.

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Definitions:

Brings Together

Describes the act of gathering or assembling people, items, or ideas in one location or conceptual framework.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing to produce and sell, holding other factors constant.

Demand

The desire for a particular good or service combined with the ability and willingness to pay for it.

Emergent Property

A characteristic or phenomenon that arises from the interaction and organization of individual components in a system, not predictable from the properties of the individual parts.