If grazing land is used by all individuals on a free open range, they will operate until
A)The AP of the land equals the opportunity cost of the input
B)The MP of the land equals the opportunity cost of the input
C)The TP of the land equals the opportunity cost of the input
D)The MP of the land is larger than the opportunity cost of the input

Question

Quizplus · Accepted Answer

When grazing land is used by all individuals on a free open range, they will continue to operate until the AP (average product) of the land equals the opportunity cost of the input, which is the cost of giving up the next best alternative use of the resources. This is because at this point, each additional unit of input put into the land will yield the same amount of output as the opportunity cost of that input. Therefore, any additional use of the land beyond this point would result in a lower output than the opportunity cost of the input, leading to a reduction in profitability.

If Grazing Land Is Used by All Individuals on a Free