A competitive fishing industry consists of five independently owned and operated fishing boats working out of the port of Ithaca. Assume that no other fishermen fish Cayuga Lake, and that the MC of operating a boat for 1 day is equivalent to 65 pounds of fish. (A boat left idle generates no costs.) [The total catch per shoreline, in pounds, is given in the table below as a function of the number of boats fishing the east and west shores of the lake.]

a. Complete the following table by filling in average and marginal catch:

Instructions: Enter your answers as whole numbers.

	East shore			West shore
Number of boats per side	Total catch	Average catch	Marginal catch	Total catch	Average catch	Marginal catch
0	0			0
1	125			115
2	185			175
3	225			210
4	255			235
5	275			255

b. If each boat owner decides independently which side of the lake to fish and all boats are in plain view of each other, how many boats would you expect to find fishing each shore on any given day? What is the net catch (that is, the total catch from both shores, less operating costs)?

Instructions: Enter your answers as whole numbers.

Boats on east shore: Boats on west shore: Catch: c. Is this distribution of fishing craft optimal from the social point of view? If so, explain why. If not, what is the socially optimal distribution and the corresponding net catch?

multiple choice

• No, the optimal allocation is to send one boat(s) to the east shore, one to the west shore, and leave three boat(s) idle. The net catch will be 125 + 115 2(65) = 20.

• No, the optimal allocation is to send one boat(s) to the east shore, one to the west shore, and leave three boat(s) idle. The net catch will be 125 + 115 2(65) = 75.

• Yes, this is the optimal allocation.

• No, the optimal allocation is to send one boat(s) to the east shore, one to the west shore, and leave three boat(s) idle. The net catch will be 125 + 115 2(65) = 110.