Q. 10 The following table gives hypoth... [FREE SOLUTION]

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Chapter 31: Q. 10 (page 708)

The following table gives hypothetical annual total costs and total benefits of maintaining alternative populations of Asian elephants.

a. Calculate the marginal costs and benefits, and draw marginal benefit and cost schedules.
b. Given the data, what is the socially optimal world population of Asian elephants?
c. Suppose that two events occur simultaneously. Technological development allows machines to do more efficiently much of the work that elephants once did, which reduces by $$10$ million the marginal benefit of maintaining the elephant population for each $7, 500$ increment in the elephant population. In addition, new techniques for breeding, feeding, and protecting elephants reduce the marginal cost by $$ 40$ million for each $7, 500$ increment in the elephant population. What is the new socially optimal population of Asian elephants?

Short Answer

Expert verified

(a) The proportional prices and rewards $410$ .

(b) $30000$ Asian elephants in ideal ecologically perfect world's total.

Step by step solution

Introduction

This unit benefit is really the substantial distinction expense as occurred because when quantity supplied has enhanced, and the correlated only along with emergence of a bunch further .This might result in change in one asset's performance, but it could also allude to just a degree of increment cost if business is expanding from a tiny minority.

Explanation (a)

a. Obtain its effective cost benefit according chooses to follow:

Each following table illustrates that comparative expenses and advantages of Asian elephant ecology.

Graph (a)

Another graphic illustrating overall average costs and benefits associated:

Explanation (b)

b. That overall trajectory is where all the net relevant costs is equivalent. Because each $30000$ elephants comes once probable reward as well as spending are identical.

Explanation (c)

c. Is if advantage gets dropped by $$ 10$ million or the proportional consumption is lower by $$ 40$ million by each $7500$ elephants, its potential profit or marginal would indeed be: