Melanie and Oli are competing Pacific halibut fishers. Both have been allocated ITQs that limit their catch to 1,000 tons of Pacific halibut each. Melanie's cost per ton is $20; Oli's cost per ton is $28. Refer to the information given. If the

market price of Pacific halibut is $40 per ton, what is the maximum amount Melanie would be willing to pay per ton for Oli's ITQs?

A. $20.
B. $28.
C. $40.
D. $12.

Answer: A