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Hello! Just need help with C and D A competitive fishing industry consists of 5 independently owned and operated fishing boats working on Needle Lake.
Hello! Just need help with C and D
A competitive fishing industry consists of 5 independently owned and operated fishing boats working on Needle Lake. Assume that no other fishermen currently have access to Needle Lake, and that the MC of operating a boat for one day is constant and equivalent to 70 kilograms of fish. A boat that is left idle generates no costs. The total catch per shoreline, in kilograms, is given in the following table as a function of the number of P boats fishing the East and West shores of the lake. 180 150 a.) If each boat owner decides independently which side of the lake to fish on 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)? (4) b.) Is this distribution of fishing craft optimal from the social point of view? Explain why or why not. If not, what is the socially optimal distribution and the corresponding net catch? (4) .) Now assume that others gain access to fishing at the Lake. They have the same MC of operating a boat. How many boats would enter, what would be the allocation of boats to the East and West shore and what would be the total and the net catch? (3) d.) Explain how we could use either a lump sum tax per boat or the allocation of fishing licenses to achieve the socially optimal outcome. Although they both canStep by Step Solution
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