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 $8;Kyle's cost per ton is $12. Refer to the information given.If the market price of sockeye salmon is $15 per ton,what is the minimum amount per ton that Kara would have to offer Kyle to convince him to sell Kara his ITQs?

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Quizplus · Accepted Answer

Kyle's cost per ton is $12, and the market price is $15, giving him a profit of $3 per ton. Kara would need to offer at least $3 per ton to make it worthwhile for Kyle to sell his ITQs.

Kara and Kyle Are Competing Sockeye Salmon Fishers