Sue fishes for cod at a cost of $2 per ton, while Dave fishes at a cost of $4 per ton. Both have one 1,000-ton ITQ and the current market price is $5 per ton. If Dave offered to sell his ITQ to Sue for $2,000, he and Sue would

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Sue would benefit from buying Dave's ITQ because her cost of fishing is $2 per ton, making her profit $3 per ton ($5 market price - $2 cost). By acquiring Dave's ITQ, she could catch an additional 1,000 tons, leading to an extra $3,000 profit ($3 profit per ton x 1,000 tons), even after paying Dave $2,000 for his ITQ. Dave benefits because he avoids the loss from fishing at a cost of $4 per ton when the market price is $5, earning him only $1 per ton. By selling his ITQ for $2,000, he makes more than he would by fishing, considering his higher costs.

Sue Fishes for Cod at a Cost of $2 Per