We develop a bioeconomic model to analyze a fishery with fixed costs as well as a within-season continuous cost function for the generalized Schaefer production function with increasing marginal returns to effort level. We analyze the consequences of the combined effects of increasing marginal returns and fixed costs. We find that regardless of the magnitude of the fixed costs, cyclical policies are optimal. We also demonstrate that the danger of potential collapse increases with increasing fixed costs. This result is quite counterintuitive, as higher costs are usually considered to have a conservative effect on resources.

JEL Classification Codes: Q20, Q22, Q57