1.4. The U.S. Bureau of Land Management sets a fee for ranchers who graze their animals on public land. The fee is equal to $1.43 per animal unit per month—the amount of forage needed to feed one cow and its calf, or five sheep, for a month. The market rate for grazing on private land is about $14 per animal unit per month. (LO8W-3)

a. Why do you think there is a difference?

b. What are the advantages of setting the lower fee?

c. Would you expect excess demand for government grazing land? Why? Demonstrate graphically.