48


 Price in
 Region i

 P / MC.
 P2i -
 A I



 kY B I
 -kti y K .
 kfi i I MRi
 I P. (Y ..., YN)

 0 Y2iYi Catch in Region i
 2 Yii Yl


 Figure 9. Equilibrium in a multi-sector fishery with variable
 price and pecuniary externalities


constant price and output. The main concern, in so far as the multi-

sector fishery is concerned, is the correct choice of price. Consider,

for example, that C. i = 1, ..., N are the desired yields for the N
 1
regions. Now, if the relevant demand curve for region i is given by

 P. = P (C., ., Cn) (39)


the resulting expected price will be given P. = E[ P. (Y' Y ) ].
 1 1' n
This price reflects the interregional price effects and is used to

derive the appropriate levels of inputs. If, however, interregional

price effects are ignored and the demand function erroneously is assumed

to be of the form

 Pi = Pi (Ci) (40)


 the resulting expected price, P) ] will not be the