Kara and Kyle are competing sockeye salmon fishers. Both have been allocated ITQs that limit their catch to 2,000 tons of sockeye salmon each. Kara's cost per ton is $6; Kyle's cost per ton is $10. Assume that the market price of sockeye salmon is $14 per ton. If Kara pays Kyle $5 per ton for his ITQs, and if she then catches her new limit of 4,000 tons, her profit would be?

Kara and Kyle are competing sockeye salmon fishers. Both have been allocated ITQs that limit their catch to 2,000 tons of sockeye salmon each. Kara's cost per ton is $6; Kyle's cost per ton is $10. Assume that the market price of sockeye salmon is $14 per ton. If Kara pays Kyle $5 per ton for his ITQs, and if she then catches her new limit of 4,000 tons, her profit would be?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 20P: May and Raj me the only two growers who provide organically grown corn to a local grocery store....

See similar textbooks

Similar questions

A4 1. Two chemical companies, A and B, operate in a small New England town. Every week A releases 40 gallons of dioxin into the town’s aquifer, while B releases 30 gallons during the same time frame. It would cost A $800 per gallon to clean up its production, while B can clean up its waste at a cost of $500 per gallon. After this issue is raised at a town hall meeting, the town’s residents vote to reduce total dioxin pollution to 20 gallons per week. a. What would be the total cost of pollution reduction if each company were limited to 10 gallons of waste per week? b. What would the total costs be if each company received 10 gallons worth of tradable pollution credits? 2. A wheat farmer and a cattle rancher occupy adjacent parcels of land. Every year the farmer builds a fence to keep the cattle out of his field, and every year the rancher tears the fence down so that the cattle can roam free. The farmer values the wheat that gets destroyed at $300, while the rancher values having a…
5. Suppose there is a Chinese firm that could produce a "widget" at a cost of 9qw, where qw is the number of widgets. It can then ship these widgets to a U.S. firm at a transport cost of $1 per unit and for a price of pw. The U.S. firm can then turn one widget into one car at a cost of $10. Cars are then sold on the world market, where inverse demand for cars is given by: P = 500-2Q. (a) If the Chinese firm is a perfect competitor, what is P = TU.S. = Q = qw= Pw= Chinese = (b) If the Chinese firm is a monopolist, what is P = = TU.S. Pw= qw= TChinese =
You have recently been hired as the business manager for a small arthouse cinema in Japan. The cinema screens independent arthouse movies aswell as older independent movies. The rights to show these types of movies is negligible (assume the marginal cost equals zero). The business also has a loungethat serves drinks as well as small plates of food. The current business model is that the films are screened for free (movie tickets are free) and the business earns its revenue from sales in the lounge that occur before, during and after thescreening of the films. You have been hired to develop a new pricing strategy to improve profits Your first action was to commission an econometric study to estimate demand and demand characteristics. The study concluded there are two main types of customers having different demand. The study further concluded that the main observable characteristic between the two customer types is age. Note that ageis correlated with unobservable characteristics like…
May and Raj me the only two growers who provide organically grown corn to a local grocery store. They know that if they cooperated and produced less corn, they could raise the price of the com. If they work independently, they will each earn 100. If they decide to work together and both lower their output, they call each earn 150. If one person lowers output and the other does not, the person who lowers output will earn $1 and the other person will capture the entire market and will earn 200. Table 10.6 represents the choices available to Mary and Raj. What is the best choice for Raj if he is sole that Mary will cooperate? If Mary thinks Raj will cheat, what should Mary do and why? What is the prisoners dilemma result? What is the preferred choice if they could ensure cooperation? A = Work independently; B = Cooperate and Lower Output. (Each results entry lists Rajs earnings first, and Marys earnings second.)
The magazine Science 84 planned to announce a contest in which anyonecould submit a request for either $20 or $100. If fewer than 20% of the submissions requested $100, then everybody would receive what they requested. If 20% or more asked for $100, then everybody would get nothing. Although the magazine wound up not running the contest, because Lloyds of London was unwilling to insure against losses, we can still analyze what equilibrium would predict. Suppose 100,000 people might participate in the contest, and assume that payoffs are measured in money.a. Assume that every possible participant submits a request for either $20or $100. Find a Nash equilibrium.b. Now suppose that a request form comes only with the purchase of Science 84 and that the magazine costs $21.95. Then each person’s strategy set has three elements: do not buy the magazine, buy the magazine and submit a request for $20, and buy the magazine andsubmit a request for $100. Suppose zero value is attached to…
Your professor has decided that, from now on, students who receive less than a 60 percent grade onany exam will be eligible to go to a review session. Ifthey attend the session, they will receive an extra 10percent on their grade. You see a problem with thispolicy, and instead propose to your professor thatpeople who go to the review session should receive50 percent of the difference between their grade and60 percent. Explain why this situation represents atrade-off between equity and efficiency
Please help me with this! 5
The maximum amount of steel or aluminum thatCanada and France can produce if they use all thefactors of production at their disposal with the bestthe technology available to them is shown (hypothetically) in Table 2.8.
The U.S. exports of digitally enabled services was less than US$300 billion in 2011. O True O False Type here to search LC F2 F3 F5 F6 F8 F9 F10
Five roommates are planning to spend the weekend in their dorm room watching movies, and they are debating how many movies to watch. Here is their willingness to pay: Willingness to Pay (Dollars) Yakov Charles Gilberto Lorenzo Sam First film 18 15 10 8 5 Second film 16 12 8 5 1 Third film 14 9 6 0 0 Fourth film 12 6 3 0 0 Fifth film 10 3 0 0 0 Buying a DVD costs $20, which the roommates split equally, so each pays $4 per movie. The efficient number of movies to watch (that is, the number that maximizes total surplus) is movies. Complete the following table by indicating the preferred number of movies from the standpoint of each roommate. Roommate 0 1 2 3 4 5 Yakov Charles Gilberto Lorenzo Sam The median roommate prefers movies. Suppose the roommates…
Help me with this problem
Exercise 4.2 Consider the response of firms in a world with two identical countries (Home and Foreign). Assume that a firm must incur an additional cost t for each unit of output that it sells to customers across the border. Consider the decisions of firms 1 and 2 (with marginal costs c, and c₂) in the figures below. Firm 2 can profitably operate A. in both the domestic and the export markets. Click in calart unir anewer and then click t -ewar Cost, C and Price. P Domestic (Home) Market Quantity Firm 2 can profitably operate A. in both the domestic and the export markets. O B. in the export market only. OC. in neither the domestic nor the export markets. OD. in its domestic market only. MC₂ MC₁ D Co: 8 c C₂ 2 Export (Foreign) Market 09 Quantity Quantity MC₂ -MC, D Q MC1 D 8C₁1 Quantity