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Melanie and Oli are competing Pacific halibut fishers. Both have been allocated ITQs that limit their catch to 1,000 tons of Pacific halibut each. Melanie's cost per ton is $20; Oli's cost per ton is $28. If the market price of Pacific halibut is $40 per ton, what is the minimum amount per ton that Melanie would have to offer Oli to convince him to sell Melanie his ITQs

Answer :

Answer:

$12

Explanation:

The computation is shown below:

Given that

Melanie's Cost per ton = $20

Market price per ton = $40

Oli's cost per ton = $28

Based on the above information, the minimum amount per ton is

= Market price per ton  - Oli's cost per ton

= $40 - $28

= $12

By deducting the oil cost per ton from the market price per ton we can get the minimum amount per ton

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