Lionfish is an aquatic invasive species in the southeastern U.S. and the Caribbe

Question

Lionfish is an aquatic invasive species in the southeastern U.S. and the Caribbean. Current removal policies focus on harvesting the lionfish for human consumption. However, a fishing license is required to fish in most southern states. Assume the supply of fishing licenses is Qs = 50 + 0.05L + 40P, where L = lionfish population and P = price of a fishing license, and the demand for fishing licenses is Qd = 1400 – 60P. What is the equilibrium price and quantity of fishing licenses when L = 1,000?

Explanation / Answer

when L= 1000

Qs =50 + 0.05L + 40P = 50+ 50+40P =100+40P

Qd = 1400 – 60P

for equilibrium

Qs =Qd

100+40P =1400 – 60P

1300 =100P

P=13 is equilibrium price

Qs= 100+40(13) =100 +520 =620 is equilibrium quantity

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