# A total cost curve shows the relationship between pressure

This chart below shows the average variable cost function. . AVC is rising but the falling pressure of AFC is more than rising presuure of AVC, hence SAC is. TABLE 9A.1 Construction of New Housing and Construction Materials Costs, All of this put pressure on the prices of construction materials like lumber and wall curve shows the relationship between a firm's output (q) and average total cost . Answer to QUESTION 1 A total-cost curve shows the relationship between the a. quantity of output produced and the total cost of pr.

The slope of this total variable cost curve is marginal cost. The graph to the right is the total variable cost curve for the short-run production of Wacky Willy Stuffed Amigos those cute and cuddly armadillos and tarantulas. The most striking feature of the total variable cost curve is its shape. This curve begins relatively steep, then flattens, before turning increasingly steep once again. In fact, it is somewhat reminiscent of the total product curve.

As a mater of fact, the total variable cost curve can be derived directly from the total product curve. The slope of the total variable cost curve flattens as the first four Stuffed Amigos are produced. This range of output corresponds with increasing marginal returns found in Stage I of production.

Increasing marginal returns causes the total variable cost curve to flatten. The slope of the total variable cost curve becomes increasingly steeper after the fourth Stuffed Amigo is produced.

This range of output corresponds with decreasing marginal returns, and the extremely important law of diminishing marginal returnsfound in Stage II of production. Deceasing marginal returns causes the total variable cost curve to become steeper. The total variable cost curve provides the foundation upon which the total cost curve is built. In fact, the total cost curve and the total variable cost curve are parallel, matching slope for slope at each quantity, with the equal distance being total fixed cost.

The equality of the slopes means that both curves can be used to derive marginal cost. However, as fish is a renewable resource depending on defined physical and biological conditions, they should be taken into account, in order to find out how a fishery as a whole not just a given type of fish processing plant or fishing boat can be operated in a sustainable way.

Micro-economics applied to fisheries is now a well developed branch of modern fish biology, where the interaction of biological knowledge and micro-economics has led to the development of mathematical models regarding the economics and sustainability of a fishery as a whole. It is for the single fisherman or company, to adjust his own micro-economic analysis to the general micro-economic analysis of the resource for his exploit and the whole exploitation to be sustainable.

In practice, this is one of the main problems of today's fisheries. The production function has been defined as the relationship between the quantity of inputs used and the resulting quantity of product. In terms of a fishery, the production function expresses the relationship between the fishing effort applied and the fish caught. A fishery is considered here to be a stock of a species exploited by a group of fishermen, boats or fishing units.

In practice, conditions are as complex as the fisheries are varied. The production function in a fishery depends on the reproductive biology of the stock of fish.

Most theoretical treatments of fisheries economics use the analysis originally defined by Schaeferwhere the growth of a stock of fish is assumed to be a function of volume, expressed in units of weight. The biomass of an unexploited fishery resource will grow at different rates depending on its size, and will increase towards a maximum point which, once attained, will remain constant. This population size is known as the population size in the virgin state Anderson, The physical and chemical parameters influencing the fish population size and the rate at which the resource reaches its maximum point, include salinity, temperature, prevailing currents, feeding habits of other species, rate of photosynthesis, quantity of radiated solar energy and rate at which mineral elements are replaced.

If these parameters are assumed to be constant, the three population components that will determine the growth of the resource are: In the Schaefer analysis, it is assumed that the increase in the biomass of a fishery is a function of the population.

It can be shown as a bell-shaped curve, as shown in Figure 5. The horizontal axis measures the size of the population, and the vertical axis the growth per period; both are given in terms of weight.

For stocks of small size, the net effect of recruitment and individual growth is greater than natural mortality. The natural growth is positive and increases with the size of the stock.

A point will eventually be reached where recruitment and individual growth will equal natural mortality, and the growth of the stock will cease.

This struggle between different forces can vary with different species, but in general the growth curve maintains its bell-shape. In some cases, the right side of the curve can asymptotically draw nearer to the horizontal axis, in a more or less pronounced manner. According to Figure 5.

Therefore, the population will not grow above this size. This point will be the natural population equilibrium. When man begins to exploit a fishery, he becomes a predator who disturbs the population equilibrium. A new equilibrium point will thus be reached, where the net increase in weight due to natural factors, will equal the net reduction due to the fishing mortality.

At any point in time, the catch or fishing mortality will be a function of the size of the stock and the quantity of fishing effort that is applied to the fishery. For any population size, the greater the fishing effort, the larger the catch; and for any degree of effort, the larger the population the larger the catch.

Mortality due to fishing can be shown on a graph as a function of the fishing effort if the population remains constant, or as a function of -the population if the effort remains constant. Given that the catch varies with levels of effort, the equilibrium size of the population will differ for each level of effort Figure 5. This is important as fishing effort is a variable defined by man and should be controlled by him.

The catch is a function of the size of the stock and degree of effort, but as the size of the stock in the equilibrium is a function of effort, the yield of fish in the equilibrium V is a function of effort only. The catch obtained from a level of effort and its corresponding population equilibrium is called Sustainable or Sustained Yield.

It is sustainable because the size of the population will not be affected by fishing, since catch is balanced by the natural increase of the stock. Therefore, the same level of effort will supply the same level of catch in the following period.

The series of points which represent catches from sustainable yield for each level of effort, is called the Sustainable Yield Curve. For the hypothetical fishery in Figure 5. The vertical axis measures catch in weight and the horizontal axis measures the effort, as would occur for a typical production function in the short run, with effort as a variable input.

The concepts of average and marginal sustainable yield, whose curves are shown in Figure 5. These concepts are also comparable with the average and marginal products. Then it becomes negative. This implies that additional levels of effort over the point of MSY will actually reduce catch. Changes in fishing effort will produce a change in the equilibrium size of the population, but time will pass before the new equilibrium can be reached.

In cases where this delay is substantial, the yield curves for specific population sizes can be used as production functions in the short run, such as those shown by dotted lines in Figure 5.

A different curve is necessary for each population size. Of the two curves shown, the higher one corresponds to the larger population P2, and P3 are the same as in Figure 5. The general concept used to develop the models of population dynamics that are used to evaluate fishery resources and recommend management measures can be simplified by Russell's formula: In other words, the population tends to increase or decrease according to whether the increases or decreases are greater.

Of all these parameters, the only one that can be controlled by man is catch Cthrough which he can change the size of the population during successive periods F2, F3, The methods that are generally applied to estimate the size of a population and the possible relationship between the rate of natural increase and the intensity and conditions for exploitation for example, rate of exploitation, age at first capture, etc.

Analytical or structural methods are used to study population size and dynamics by examining its main components and the changes that they experience. On the other hand, synthetic methods, best shown by global production models, are those that treat the population as a closed entity where no notice is taken of changes that occur internally.

Only the relationship between the stimulus, usually represented by the intensity fishing effortand the total catch and catch per unit effort response obtained, are analysed. The following analytical methods will be examined: Of all the parameters, the only ones that can be voluntarily controlled by man are fishing mortality, which is assumed to be proportional to the fishing effort number of boats, fishermen, etc.

If these parameters are known, a rather complex equation proposed by Beverton and Holt or some modified version proposed by other authors, can be used to estimate the average catch that each recruitment can yield, for a certain combination of fishing mortality values and age at first catch.

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If the recruitment is known, it will also be possible to estimate the total potential catch of the entire year class and of the population. In this way, with a retrospective analysis of the catch of each year class over time, an estimate can be made of the number of individual fish that were present in the population in the past. To apply this method, the total catch and the natural mortality in each year, for each group of a certain age needs to be known, in addition to the fishing mortality or abundance for the last fishing season.

Then a series of equations presented and discussed in detail in the works of Gulland, ; Pope, ; and Cadima, are applied to estimate the size of each year class and the population that existed in the past. Other methods are used when the time series values for catch and effort are not available Garcia et al.

Analysis is made of the global method of production based on the law of population growth in the natural state and which follows a sigmoid shaped curve. Schaefer proposed a method for estimating the potential catch of a fish population, relating surplus production or sustainable yield to a measure of the population abundance or the fishing mortality. This model rejects the assumption that under equilibrium conditions, the abundance or catch per unit effort U decreases in a linear form with increases in fishing effort E.

This relationship can be represented by the equation: Ut is the abundance; Et is the fishing effort at a specific time; U00 is the index of the catch capacity or population size in the virgin state, and b is a constant.

The highest point of the parabola is known as Maximum Sustainable Yield. The simplicity of the fundamental theories and the fact that only data on catch and fishing effort are required easily acquired statistical data which are also used for other purposes and by other users resulted in production models and data collection on catch and effort, becoming the standard method for analysing and evaluating most fisheries.

In many cases, this leads to erroneous conclusions, due to the lack of complementary information. Pella and Tomlinson and Fox have proposed modified versions of this model in order to adapt it to specific applications and improve adjustments in particular cases. Csirke and Caddy proposed a modified version which allows this type of model to be applied to fisheries for which only data on catch or abundance indices, and estimates of total mortality are considered.

This is particularly useful in cases where adequate data do not exist.