A mountain village owns a common pasture where villagers graze their goats. The cost to a goat owner of owning and caring for a goat is 4 groschens. The pasture gets overgrazed if too many goats share the pasture. The total revenue from all goats on the common pasture is f(g) = 48g - 2g2, where g is the number of goats on the pasture. The town council notices that total profit from the pasture is not maximized if villagers are allowed to pasture goats for free. The council decides to allow a goat to use the common pasture only if its owner buys it a goat license. To maximize total profit (of villagers and council) , how many groschens per goat should the council charge?
A) 12
B) 20
C) 24
D) 26
E) 22
Correct Answer:
Verified
Q1: If there are negative externalities in production
Q3: Mike's utility function is U(c, d, h)
Q4: Two stores are located side by side.
Q4: The only known way to eliminate externalities
Q6: The efficient amount of air pollution is
Q10: The "tragedy of the commons" refers to
Q12: The 130 campers at Bear Creek Campground
Q13: A trade between two people is an
Q16: Mobil Oil Corporation recently bought the right
Q17: If preferences are quasilinear, then the delineation
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents