Under the Gordon fisheries model, without intervention, fishers keep entering until … (you might want to draw the graph as a reminder)

Question

Quizplus · Accepted Answer

Under the Gordon fisheries model, the equilibrium occurs when the social marginal cost equals the social marginal revenue. This implies that the marginal cost of extracting an additional unit of fish should be equal to the marginal revenue generated by the sale of that unit of fish. Therefore, the correct answer is D, which says that the fishers keep entering until the marginal cost equals average revenue.

Under the Gordon Fisheries Model, Without Intervention, Fishers Keep Entering