38


Variable Product Price


 Since most fishery analyses are done at the aggregate or industry

level, the validity of a constant product price is questionable.

Relaxing the assumption of constant product prices complicates some of

the traditional theoretical results in the context of equilibrium yield

functions. Anderson (1976) has shown that both the derivation of maxi-

mum economic yield (MEY) and the results of unregulated competition are

obscured when product price is variable. Consider Figure 7 which illus-

trates the MEY and open access solutions under the assumption of a

constant product price, p.


C-)
V


a)
w4


E E
m c


Figure 7.


Effort


Open access equilibrium and maximum economic yield
in a fishery with constant product price


 The curve labeled TR is the "monetized" sustainable yield functions

and the line labeled TC corresponds to total cost. In that price is

constant, it is important to note that the sustainable yield function

retains its shape. There are unique effort levels corresponding to