Shrimp Galore, a shrimp harvesting business in the Pacific Northwest, has a 30-year loan on its shrimp harvesting boat. The annual loan payment is $25,000 and the boat has a market (salvage) value that exceeds its outstanding loan balance. Prior to the 2010 shrimp harvesting season, Shrimp Galore's accountant predicted that at expected market prices for shrimp, Shrimp Galore would have a net loss of $75,000 dollars after paying all 2010 expenses (including the annual loan payment) . In this case, Shrimp Galore should
A) produce nothing and experience a loss of $25,000.
B) produce nothing and experience a loss of $75,000.
C) continue to operate because expected profits will rise in the future.
D) continue to operate even though it predicts a loss of $75,000.
Correct Answer:
Verified
Q199: The short-run supply curve for a firm
Q335: In the short run, a firm operating
Q337: Susan quit her job as a teacher,
Q338: Competitive firms that earn a loss in
Q339: A profit-maximizing firm in a competitive market
Q341: Figure 14-2
Suppose a firm operating in a
Q342: Figure 14-3
Suppose a firm operating in a
Q343: Figure 14-3
Suppose a firm operating in a
Q344: Figure 14-1
Suppose that a firm in a
Q345: Figure 14-3
Suppose a firm operating in a
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents