Question
2 ranchers use a grassland to feed their cows. The ranchers must choose how many cows to raise. The benefit of raising a cow
2 ranchers use a grassland to feed their cows. The ranchers must choose how many cows to raise. The benefit of raising a cow for a rancher is 100-50 per cow, where G is the total quantity of cows using the grassland. The marginal cost of raising a cow is 10. Hence, the net benefit of raising cows for any rancher is (100-5G)g-10g, where 9 is the quantity of cows raised by the rancher. What is the social optimum quantity of cows using the grassland?
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