-The table above shows the marginal social benefit of fishing in Mediterranean Sea.The marginal private cost of operating a fishing boat is the same for all producers,$300 per hour.The marginal social cost is twice the marginal private cost.If the government uses individual transferrable quotas to achieve the efficient outcome,what is the total quantity of fish caught?
A) 0 tons
B) 100 tons
C) 200 tons
D) 300 tons
E) 500 tons

Question

-The table above shows the marginal social benefit of fishing in Mediterranean Sea.The marginal private cost of operating a fishing boat is the same for all producers,$300 per hour.The marginal social cost is twice the marginal private cost.If the government uses individual transferrable quotas to achieve the efficient outcome,what is the total quantity of fish caught?
A) 0 tons 
B) 100 tons 
C) 200 tons 
D) 300 tons 
E) 500 tons

Quizplus · Accepted Answer

The efficient outcome occurs where marginal social benefit equals marginal social cost. Since the marginal social cost is twice the marginal private cost, it is $600 per hour. The table must show that at 200 tons, the marginal social benefit equals $600.

-The Table Above Shows the Marginal Social Benefit of Fishing