2 ranchers use a grassland to feed their cows. The ranchers must choose how many cows to raise. The benefit G of raising a cow for a rancher is 100-5G₁ per cow, where 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 quantity of cows that each rancher raises in a Nash Equilibrium?
2 ranchers use a grassland to feed their cows. The ranchers must choose how many cows to raise. The benefit G of raising a cow for a rancher is 100-5G₁ per cow, where 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 quantity of cows that each rancher raises in a Nash Equilibrium?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter12: Environmental Protection And Negative Externalities
Section: Chapter Questions
Problem 10SCQ: Suppose a city releases 16 million gallons of raw sewage into a nearby lake. Table 12.8 shows the...
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