together with the corresponding level of effort represent the optimum

position of a fishery.

 These results have been obtained from bioeconomic models involving

a constant price of fish and a single sector fishery. When price

becomes variable the results of the above models are obscured. If, in

addition, the fishery contains more than one sector with pecuniary

externalities across sectors, the equating of marginal revenues and

marginal costs within each sector is no longer sufficient to ensure that

returns to the resource are maximized.

 A multi-sector model of a fishery with variable product price and

pecuniary externalities was developed to analyze the GMRFF. Each state

in the GMRFF constituted a sector. This model lead to the conclusion

that maximum economic yield would not be achieved by equating marginal

revenue and marginal cost for each state in isolation because of

pecuniary externalities. The separate equating of marginal revenue and

marginal cost in each state fails to account for across-state price

effects. To internalize this pecuniary externality, all states' costs

and revenues had to be considered simultaneously. The attainment of

maximum economic yield required that the marginal cost in each state be

equated to the marginal change in total industry revenue attributable to

changes in catch in each state. Simultaneous treatment of all sectors

in obtaining the marginal conditions for maximum economic yield thus

internalized the pecuniary externalities present.

 To apply this theory to the GMRFF, a statistical model was speci-

fied and estimated. The model included a system of state catch equa-

tions and a system of state price equations. In addition, a cost

equation for each state was developed.