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Ingvar and Olaf are the only two fishermen in their area. Each has been assigned an ITQ th

Ingvar and Olaf are the only two fishermen in their area. Each has been assigned an ITQ th

Ingvar and Olaf are the only two fishermen in their area. Each has been assigned an ITQ that allows him to catch 20 tons of salmon. Ingvar’s MC of catching salmon is $6 per ton while Olaf’s MC of catching salmon is $7 per ton. If the price of salmon is $10 per ton, then to maximize efficiency, the two guys should trade ITQs until Ingvar is in charge of catching _________ tons while Olaf catches __________ tons.

a. 20; 20.

b. 30; 10.

c. 40; 0.

d. 0; 40.

Abhinav 05-Dec-2019

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