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Suppose foreign shrimp prices drop by 32 percent and importers gain a 90 percent market share. From this information, what would economists strongly suspect about this industry? The large sales of foreigners indicate they are better strategic business bargainers than Americans are. Foreign sellers probably are colluding on price to maximize profits. Foreigners have a comparative advantage in shrimping. Americans have a comparative advantage in shrimping

1 Answer

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From this information, Economists would strongly suspect that "Foreign sellers probably are colluding on price to maximize profits," since the prices should not be spiking.
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User Pravanjan
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