Impact of lower prices and production efficiency
Assume that the demand schedule for shrimp by US consumers was constant, a shift in the supply of imported shrimp would shift the US market total supply curve to the right.2 This lowers market price received by domestic producers and now, a domestic firm with a current cost structure that only returns normal profits is not able to maintain its economic viability. It either has to exit the industry or operate at a loss. If the firm is the shrimp boat operator, it is a price taker and cannot control the price of its output. However, shrimp trawlers have some control of costs, and efficiency in producing its output. If shrimp boat operators can lower their cost or increase their production efficiency they might be able to weather lower prices from the marketplace. If South Carolina shrimp boat operators are at the peak of their efficiency, then there is not a lot they can do in terms of lowering their costs. If they are inefficient, they can improve.