Suppose you need to remove 70 exotic fish from a lake into which they were unintentionally introduced. You have three possible removal methods, methods 1,2 and 3. Assume q1, q2, and q3 are respectively the amount of fish removed by each method that you choose to use, such that q1+ q2 + q3=70. The marginal costs of each removal method are: MC1 = $10q1 MC2=$5q2 MC3 =$2.5q3
a. How much of each method should you use to achieve the removal cost effectively
b. Why isn’t exclusive use of method 3 cost--effective?
c. Suppose the marginal costs were constant (not increasing as in a) such that MC1 = $10 MC2 = $5 MC3 = $2.5 What is the cost effective strategy in this case?