Khan is a wholesale imported fish distributor.He sells his imported fish to all the restaurants in town and he is the only distributor of a specialty imported fish.Assuming that Khan is maximising his profit, which of the following statements is true?

Question

Quizplus · Accepted Answer

As Khan is the only distributor of a specialty imported fish, he has a certain degree of market power or monopoly. In this scenario, he can charge a price for his fish that exceeds his marginal cost, thereby maximizing his profits. If he were to charge a price equal to his marginal cost, he would not be able to earn a profit in the long run. Therefore, option B is the correct answer. Option A is incorrect because if Khan were to charge a price equal to marginal cost, he would not be earning any profit. Option C is incorrect because if he were to charge a price less than marginal cost, he would not be able to cover his costs and eventually go out of business. Option D is irrelevant to the scenario given.

Khan Is a Wholesale Imported Fish Distributor