Kara and Kyle are competing sockeye salmon fishers. Both have been allocated ITQs that limit their catch to 2,000 tons of sockeye salmon each. Kara's cost per ton is $8; Kyle's cost per ton is $12. Refer to the information given. If the market
price of sockeye salmon is $15 per ton, what is the minimum amount per ton that Kara would have to offer Kyle to convince him to sell Kara his ITQs?
A. $3.
B. $4.
C. $5.
D. $7.
Answer: A
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