Practice_Midterm_3

Afteradayorsoofquickfactfindingyoulearnthefollowing 1

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Unformatted text preview: ce
takers
and
the
industry
is
perfectly
 competitive.
The
figure
below
shows
the
path
of
real
prices
(i.e.,
adjusted
for
the
effects
of
 inflation)
in
the
cargo
shipping
industry
between
1991
and
2004.
 10 Price per voyage ($m) 5 Year 1990 1995 20 00 20 05 
 
 You
are
a
member
of
a
consulting
team
that
is
conducting
a
study
of
the
cargo
industry,
 and
you
and
your
colleagues
want
to
try
to
make
sense
of
price
movements
in
this
market
 since
1990.

After
a
day
or
so
of
quick
fact‐finding,
you
learn
the
following.

 1. Cargo
shipping
takes
place
in
large
ocean‐going
vessels.
These
ships
are
 manufactured
in
a
handful
of
shipyards
in
Northern
Europe
and
North
Amer...
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