39


MEY (E ) and the open access solution (Ec). Now consider Figure 8,

where price is variable. It can be seen that the total revenue function

no longer retains the shape of the sustainable yield function, but

rather has become "doubled-humped" (Anderson, 1973).8 If the relevant

total cost curve is TCI, there still is a unique open access solution.

However, there are now three effort levels (El, E2 and E3) wherein

marginal cost equals marginal revenue.





 ,TC
 C 2

 I A TC1


 1 TR
 a,


E2 E3 E


Figure 8.


Open access equilibria and maximum economic yield
in a fishery with a variable product price


 Thus, the task of finding the correct solution requires finding a

global optimum from several local solutions where marginal revenues and

costs are equated. If the relevant cost curve is TC2, in addition to

multiple MEY solutions, there now exists three points (A, B and C) where


 8
 A graphical derivation of the "double-humped" sustainable revenue
function is presented in Appendix D for the case of a linear demand
function.