Kara and Kyle Are Competing Sockeye Salmon Fishers

question 132

Multiple Choice

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 $6; Kyle's cost per ton is $10. If the market price of sockeye salmon is $14 per ton, what is the maximum amount Kara would be willing to pay per ton for Kyle's ITQs?

• A)$4.
• B)$6.
• C)$8.
• D)$14.

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