Gertrude Kelp owns three boats that participate in commercial fishing for fresh Pacific salmon off the coast of Alaska. As part of her business she hires a captain and several crew members for each boat. In the market for fresh Pacific salmon, there are thousands of firms like Gertrude's. While Gertrude usually catches a significant number of fish each year, her contribution to the entire harvest of salmon is negligible relative to the size of the market. If the price of fresh Pacific salmon were to decrease significantly, it is most likely that Gertrude would:________.
A. hire more crew members.
B. reduce her demand for crew members.
C. become a seller in at least one factor market.
D. hire more boats.

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Answer: B. reduce her demand for crew members.

Explanation: The fact that, in spite of Gertrude's significant harvest, it still has a negligible contribution to the salmon market highlights the competitiveness of the salmon market and as such Gertrude has no say or influence on the market market price of salmon.

Therefore, If the price of fresh pacific salmon were to decrease, Gertrude would most likely have to reduce it's demand for crew members so as to cut the variable cost of production(labor) , hence, stabilizing the difference in cost of production and revenue.

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