Question

Using a quadratic net birth function, and linear total cost and catch functions as illustration, derive the supply function of fishery. Why this supply function is backward bending?

Answer 1

In the bioeconomic thesis, the long term fish catch supply is described by a backward-bending supply curve. The shape of the curve always show in a bell- shape.

Diagram

In most of the sectors supply increases if the price increases, but in fishery sector supply curve may goes to bend as pointed by copes.

Reasons behind the supply is backward bending:-

1. Reduction of labour

2. Scarcity of particular spices

3. Change in technology

4. Climate conditions

5. Natural disasters

6. Lack of cold storages