23


 The level of effort corresponding to this point can be derived from

the profit equation

 n = paE(b E) rE (11)


Setting 0 = 0 and solving for E yields the open access equilibrium

effort level E= b r (see Figure 5). As shown in the above figure,
 1e pa
the open access level of effort is greater than that needed to harvest

maximum sustainable yield (revenue), Em. The implications of this are

that a decrease in effort will not only free resources to be used in

other productive processes, but also an increase in equilibrium catch

will result as effort is decreased from the open access level of

E = b --, to the MSY level of effort E = (Appendix C). While
 I pa 2
 this is true in terms of Figure 5, this conclusion in fact depends upon

 the average (marginal) cost of providing effort. It can be shown that

 if average cost, r > bpa, any decrease in effort will result in a de-

 crease in equilibrium yield. Further, if r = bpa- the effort levels

 corresponding to MSY and open access equilibrium will coincide.

 The economically optimum yield, termed maximum economic yield

 (MEY), requires the maximization of the profit function shown in

 equation (11). Differentiating and solving the first-order condition

 for E yields the MEY effort level, Eopt = !(b ). A comparison of

 Eopt and E1, the open access effort level, illustrates that it is always
 necessary to restrict effort if returns to the resource are to be

 maximized.

 The seminal paper by Gordon (1954) and the ensuing analysis by

 Schaefer (1957) have provided the basis from which subsequent bio-

 economic formulations have proliferated. These additional works have