Kara and Kyle Are Competing Sockeye Salmon Fishers

question 135

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 $8; Kyle's cost per ton is $12. 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?

• A)$4.
• B)$5.
• C)$3.
• D)$7.

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