Final answer:
It is false that a single fish vendor in a competitive market can sell salmon at a higher price and affect the market price; they are price takers. Good weather conditions increase the supply, lowering the equilibrium price. A price floor for fish can lead to surpluses and black markets.
Step-by-step explanation:
The statement given in the question is False. In a competitive market, a single fish vendor is a price taker, meaning they cannot set their own prices above the market equilibrium without risking the loss of their customers. Competitors would sell at the market price, and the individual vendor's pricing power is insignificant in a competitive market.
Good Weather Conditions and Market Effects
With good weather for salmon fishing, such as mentioned with the conditions in 2015, the market would experience a shift in supply. The good weather would likely increase the quantity of salmon due to better breeding conditions and a more abundant food supply, leading to a rightward shift in the supply curve. This shift indicates that more fish can be supplied at each price level. Consequently, the increased supply would result in a lower equilibrium price for salmon, benefiting consumers but hurting producers with lower per-unit revenue.
Unintended Consequences of a Price Floor
Enacting a price floor might introduce a variety of unintended consequences in the market. These could include a surplus of fish as the minimum price is set above the equilibrium price, leading to excess unsold fish. Additionally, there might be a reduction in demand or the creation of black markets where fish are sold illegally below the price floor.