D. England coastal community is given by MSB = 40 – 1.5*q, and the marginal cost is MSC = 0.5*q; where q is thousand tons of fish harvested in the current year, and MSB and MSC are measured in million dollars. Assume overfishing will reduce the productivity and the fishery and specifically each thousand tons of fish harvested this year will reduce the present value of future benefits by 4 million dollars, that is the marginal user cost MUC = 4. Determine the quantity of output that achieves static efficiency. Determine the quantity of output that achieves dynamic efficiency. The marginal social benefits generated from commercial fishing in an New %3D a. b.
D. England coastal community is given by MSB = 40 – 1.5*q, and the marginal cost is MSC = 0.5*q; where q is thousand tons of fish harvested in the current year, and MSB and MSC are measured in million dollars. Assume overfishing will reduce the productivity and the fishery and specifically each thousand tons of fish harvested this year will reduce the present value of future benefits by 4 million dollars, that is the marginal user cost MUC = 4. Determine the quantity of output that achieves static efficiency. Determine the quantity of output that achieves dynamic efficiency. The marginal social benefits generated from commercial fishing in an New %3D a. b.
Chapter32: The Land Market And Natural Resources
Section: Chapter Questions
Problem 10E
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