Question
3) An open-access fishery for Surmai fish is available in open waters. There are n identical fishing boats. The total harvest revenue from all n
3) An open-access fishery for Surmai fish is available in open waters. There are n identical fishing boats. The total harvest revenue from all n boats is = 2 , where a and b are parameters while X is total inputs from all fishing boats such that X = x1 + x2 + ...... + xn. The revenue for an individual fishing boat is a proportion of total harvest revenue such that = ( ) , where xi is the input by one fishing boat. The total cost of one boat is cxi. a) Solve for the NE input level by one fishing boat. Given this individual level, solve for the aggregate level of input. b) Assume that there is a private owner of the entire fishery for Surmai. Solve for their optimal level of input. c) Compare the level of inputs under NE and private ownership and give an intuitive explanation of why the input levels are chosen as such.
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