What is the producer surplus in a perfectly equilibrium

Reference no: EM13234650

Suppose that ranchers can buy up to a collective total of 200 cows and run them on the open range. The value of each cow after it has grazed is given by V= $2000-10C, where C is the total number of cows on the range. The cost of buying each cow is $1000.

a. What is the producer surplus in a perfectly competitive equilibrium?

b. What number of cows would maximize the societal surplus from the ranching industry?

c. What tax would need to be imposed on each cow if a benevolent government sought to maximize the social surplus from the ranching industry?

Reference no: EM13234650

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