13.7 Local fishermen sell their daily catch at the local fish market at a price of €5 per kilo. The production function for village output is q = 240x − 2x 2, where x is the quantity of bait used each week. Bait is only available from the neighbouring village who charge €10 per day to collect it from the foreshore. The production function for bait is given by x = !l, where l represents the number of days spent collecting bait each week.

a.

Determine the equilibrium price and quantity of bait where both villages are price takers.

b.

c.