H(E) = aE – bE?, with a, b representing positive constants and E is fishing effort. Total cost is TC(E) = cE, with c being the unit cost of effort. Total revenue is TR(E) = pH(E), with p being the constant price of fish. c) Find the fishing effort that maximizes sustainable yield (harvest), EMSY- d) Explain why higher levels of effort (E) beyond a certain point are associated with reductions in long-run total revenue (TR). e) Explain why it generally is not efficiency- maximizing for society to supply the lev fishing effort that maximizes the sustainable vield.

H(E) = aE – bE?, with a, b representing positive constants and E is fishing effort. Total cost is TC(E) = cE, with c being the unit cost of effort. Total revenue is TR(E) = pH(E), with p being the constant price of fish. c) Find the fishing effort that maximizes sustainable yield (harvest), EMSY- d) Explain why higher levels of effort (E) beyond a certain point are associated with reductions in long-run total revenue (TR). e) Explain why it generally is not efficiency- maximizing for society to supply the lev fishing effort that maximizes the sustainable vield.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter7: Economies Of Scale And Scope

Section: Chapter Questions

Problem 5MC

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