Question

As a fishery manager, you must decide how many boats (B) to allow in your fishery....

As a fishery manager, you must decide how many boats (B) to allow in your fishery. Your total product (TP) , total cost (TC), marginal product (MP), and marginal cost (MC) for boats in the fishery are as follows:

TP = 250B - 4B2

MP = 150 - 8B

TC = 50B

MC = 50

Note: Total Product is similar to Total Benefit from the class videos.

A. How many boats should be added to the fishery to maximize the net benefits from commercial services?

B. What is the average product from allowing one more boat into the fishery?

C. If there are no limits on the number of boats (i.e. the fishery is a commons), how many boats will be added in the fishery?

Business   Economics   
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Homework Answers

Answer #1

Part (A)

total benefits will be maximized when 25 boats will be added to fishery

Part (B)

average product from allowing one more boat into the fishery

Part (C)

If there are no limits on the number of boats, boats will be added till the point where total product for fisher is maximized

Approximately 31 boats will be added to fishery if there are no limits on the number of boats.

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