Business, 30.03.2021 17:50 lowkeyqueenk
Cockatoos are a kind of parrot that are often caught in the Australian wild and smuggled into the U. S. for sale on Craig's List as pets. This is illegal, but it happens anyway and the market is perfectly competitive. Suppose that the cost of capturing a cockatoo and transporting it to the U. S. is about $50 per bird. Typically, they are drugged and smuggled to the U. S. in suitcases. Half of the smuggled cockatoos die in transit. Each smuggled cockatoo (whether dead or alive) has a 20% probability of being discovered, in which case the cockatoo is confiscated and the smuggler is fined. If the fine imposed for each smuggled cockatoo is $1,000, then the equilibrium street-price of cockatoos in the U. S. will be:
a. $433.33
b. $500.00
c. $250.00
d. $50.00
e. $625.00
Answers: 2
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Cockatoos are a kind of parrot that are often caught in the Australian wild and smuggled into the U....
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