An investor purchases a long call at a price of $2.60. The strike price at expiration is $37. If the current stock price is $37.10, what is the break-even point for the investor?

$39.60

Explanation:

A long call makes a profit when the price of the underlying stock is higher than the strike price and the cost of acquiring the call.

The Break-even point for the investor will be at the point where the underlying stock price will be the same as the strike price plus the cost paid to purchase the call.

Break-even point = Strike price + Price of call

= 37 + 2.60

= $39.60

answer: in the short-run firms will respond by raising the price of turkey.

explanation: initially the long-run equilibrium is at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. now, when webmd claims that a protein found in turkey will increase your expected lifespan by 4 years. the consumers demand for turkey will increase at every price shifting the demand curve to the right from d1 to d2. while, there will be no change in the supply curve in the short-run as it is not possible for producers to adjust supply so quickly. as a result the new equilibrium will occur at a higher price and a higher quantity of turkey.

thus, in the short run firms will respond by increasing the price of turkey, selling more quantity at a higher price and earning economic profits.