Overfishing along the coastline of Helsking village led the government to impose a fee on the boats used for fishing. The fishermen were charged $50 on each boat they sent out for fishing. The following table shows the total pounds of fish caught per hour and the number of boats used for fishing.Table 13.2

-Refer to Table 13.2. Suppose fish sells for $1 per pound. What is the socially optimal number of boats that will maximize the profit earned by the fishermen?

Question

Overfishing along the coastline of Helsking village led the government to impose a fee on the boats used for fishing. The fishermen were charged $50 on each boat they sent out for fishing. The following table shows the total pounds of fish caught per hour and the number of boats used for fishing.Table 13.2
 
-Refer to Table 13.2. Suppose fish sells for $1 per pound. What is the socially optimal number of boats that will maximize the profit earned by the fishermen?

Quizplus · Accepted Answer

The socially optimal number of boats is determined where the marginal cost of adding an additional boat equals the marginal revenue from the fish caught. If fish sells for $1 per pound, the optimal number of boats is where the additional revenue from the fish caught by an additional boat equals the cost of operating that boat.

Overfishing Along the Coastline of Helsking Village Led the Government