Mathematics, 24.04.2020 02:56 edog7755
Kara and Kyle are competing sockeye salmon fishers. Both have been allocated ITQs that limit their total catch to 3,000 tons of
sockeye salmon each. Kara's cost per ton is $10, and Kyle's cost per ton is $14.
a. If the market price of sockeye salmon is $20 per ton, and Kara and Kyle both catch their quota, what will be their combined profit?
$ ?
b. What is the maximum amount Kara would be willing to pay per ton for Kyle's ITQS?
$ ? per ton
c. What is the minimum amount per ton that Kara would have to offer Kyle to convince him to sell his ITQs to her?
d. If Kara pays Kyle $7 per ton for his ITQs, and if she then catches her new limit of 6,000 tons, what will be their combined profit?
$ ?
Answers: 2
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