Suppose That the Cost of Capturing a Cockatoo and Transporting

question 30

Multiple Choice

Suppose that 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 $900, then the equilibrium price of cockatoos in the United States will be

• A)$130.
• B)$85.
• C)$288.89.
• D)$67.
• E)$200.

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