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The Oceanic Pacific fleet has just decided to use a pole-and-line method of fishing instead of gill netting to catch tuna....
a)determine the point at which diminishing returns occurs
b)indicate the points that delineate the three stages of production
c) Suppose the market price of tuna is $3.50/pound. Explain how many fisherman should the company use if the daily wage rate is $100?
d)suppose a glut in the market for tuna causes the price to fall to $2.75/pound. What effect would this have on the number of fisherman used per boat? Suppose the price rose to $5.00/pound. What effect would this have on its hiring decision?
e) Suppose the firm realizes that to keep up with the demand for tuna caught by the more humane pole-and line method of fishing, each of its boats must catch at least 1000 pounds of fish per day. Given the preceding data, what should it consider doing? Explain
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