Im confused with this question Anatole is an addicted recreationist who loves to fish in Lake Elsinore. During the fall quarter I've been keeping track of when he goes fishing there, how much time and money he spends on each trip to thelake, different measures of site water quality, etc., and I have managed to estimate a demand curve for his trips to Lake Elsinore.I found that Anatole is so addicted to fishing that there are only two things that affect his behavior: the opportunity cost of a trip and the water quality (because fishing yield is better when the water is cleaner).There are no limitations to fish yield. My statistical analysis shows that Anatole's monthly demand for trips to the lake when the water is "clean" is given by q = 11-ToP ; and his monthly demand for101p ; where p is his opportunity cost of a trip and q is the number of trips.10trips when the water is “dirty" is given by q = 8-Suppose Anatole's opportunity cost of a trip (p) is $40. Answer the following questions:What is the monthly net benefit Anatole derives from fishing at Lake Elsinore when the water is dirty?O a. 160O b. 320O C. 64008 p O

Answered: Anatole 1s an addıcted recreationist…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Im confused with this question

Anatole is an addicted recreationist who loves to fish in Lake Elsinore. During the fall quarter I've been keeping track of when he goes fishing there, how much time and money he spends on each trip to the
lake, different measures of site water quality, etc., and I have managed to estimate a demand curve for his trips to Lake Elsinore.
I found that Anatole is so addicted to fishing that there are only two things that affect his behavior: the opportunity cost of a trip and the water quality (because fishing yield is better when the water is cleaner).
There are no limitations to fish yield. My statistical analysis shows that Anatole's monthly demand for trips to the lake when the water is "clean" is given by q = 11-
ToP ; and his monthly demand for
10
1
p ; where p is his opportunity cost of a trip and q is the number of trips.
10
trips when the water is “dirty" is given by q = 8-
Suppose Anatole's opportunity cost of a trip (p) is $40. Answer the following questions:
What is the monthly net benefit Anatole derives from fishing at Lake Elsinore when the water is dirty?
O a. 160
O b. 320
O C. 640
08 p O

Expert Solution

STEP 1 (INTRODUCTION)

The term “opportunity cost” refers to the value of the next best alternative foregone. While the demand for a commodity is defined as the quantity that a consumer desires to buy and is willing to pay for that much amount of quantity.

STEP 2 (EXPLANATION)

$\begin{array}{rcl} opportunity cost of a trip to lake & = & p = $ 40 \\ monthly demand for trip when water is dirty \\ q & = & 8 - \frac{1}{10} p \\ \Rightarrow & q = 8 - \frac{1}{10} \times 40 \\ \Rightarrow & q = 4 \\ now, if Anatole has not gone for fishing, then he must have save $ 40 . \\ But he has spent this amount in fishing \\ \Rightarrow & required monthly net benefit = 4 \times 40 \\ = & $ 160 \end{array}$

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