You own a company that is based in the United States and are considering expanding your business to Racket Land, a foreign country located in Europe.During your research into the feasibility of establishing your business in Racket Land, you have learned that it is common practice for companies wanting to establish themselves in Racket Land to pay a bribe of $50,000 to Racket Land's officials.The people of Racket Land consider bribes to be part ofnormal business practices.Under the Foreign Corrupt Practices Act, it is illegal for you to pay Racket Land's officials a bribe, but without paying the bribe, you will not be able to establish your business in Racket Land.You have projected that your product will be highly successful in Racket Land and have estimated the total surplus (sum of consumer and producer surplus) to be $1,000,000.Which of the following do you chose to do?

A. Pay the bribe. Establishing your firm in Racket Land will increase the total welfare in society and your firm will profit. Paying bribes is just a common practice in Racket Land and if you enter the market, it is a win-win for Racket Land and your firm.

B. Do not pay the fine and do not establish your business in Racket Land. To do so would require you to make an illegal transaction that is punishable by fines and prison.