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Assume that three people are fishing in a small lake. If they are all fishing, they each catch 6 fish per hour. If only two
Assume that three people are fishing in a small lake. If they are all fishing, they each catch 6 fish per hour. If only two are fishing, they both catch 7 fish per hour. If one is fishing alone, he catches 8 fish per hour. Assume that the market price of fish is $1 each and the market wage is $5 per hour. Suppose the government decided to restrict access to the lake and charge for fishing licenses. What would be the price of a license that would lead to the optimal level of fishing?
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