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Abstract
Increasing consumer demand for flounder and dramatic reductions in ocean flounder harvests have raised interest in summer flounder (Paralichthys dentatus) aquaculture. Flounder farmers have several potential markets, including regional seafood dealers and high‐end niche (e.g., sashimi and ike‐jime) buyers. Prices paid by buyers are exogenous to typical aquacultural budgeting models, yet they are a key determinant of potential profitability. We develop a simple economic model to assess the impacts of aquaculture industry supply on prices paid by regional seafood dealers. The model is parameterized for a region with established flounder dealers and active field research in flounder production methods. We derive the price elasticity of regional seafood dealer demand for farmed flounder, and we examine the impacts of changes in production cost and ocean harvest on regional price and the level of aquacultural production that maximizes returns to the aquaculture industry.