The inverse demand function for a certain type of fish is given as p = Ay,...

 

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The inverse demand function for a certain type of fish is given as p = Ay", where p is the price of fish, y is the quantity sold, and A and b are parameters. a) What is the price elasticity of demand? b) What is the revenue function (revenue as a function of y)? c) Suppose b has been estimated to 0.5. Graph the revenue function. d) Suppose the fish stock varies for environmental reasons and that fish landings are regulated. What would yield the highest revenue on average, landings equal to a certain fraction of the available stock or stable landings equal to the average of the variable landings? e) Suppose the catch of fish is determined by the production function y = qES where Eis fishing effort, Sis the stock of fish, and q is a constant. Would the catch strategy that maximized the average revenue d) necessarily maximize the average profit? Why or why not? The inverse demand function for a certain type of fish is given as p = Ay", where p is the price of fish, y is the quantity sold, and A and b are parameters. a) What is the price elasticity of demand? b) What is the revenue function (revenue as a function of y)? c) Suppose b has been estimated to 0.5. Graph the revenue function. d) Suppose the fish stock varies for environmental reasons and that fish landings are regulated. What would yield the highest revenue on average, landings equal to a certain fraction of the available stock or stable landings equal to the average of the variable landings? e) Suppose the catch of fish is determined by the production function y = qES where Eis fishing effort, Sis the stock of fish, and q is a constant. Would the catch strategy that maximized the average revenue d) necessarily maximize the average profit? Why or why not?

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a The price elasticity of demand is derived as dlnPdlnY b Since b 0 demand is elastic if ... View the full answer