Determine the optimal strategy for the breeder, Microeconomics

Consider a decision faced by a cattle breeder. The breeder must decide how many cattle he should sell in the market each year and how many he should retain for breeding purposes.  Suppose the breeder starts with a herd of 200 cattle. If he breeds cattle, he obtains 1.4 times as many cattle per year as he started with.  The cost of breeding is $30 for each head of cattle not sold.  Breeding takes one year, and the $30 cost includes all expenses of maintaining an animal and its offspring.  Alternatively, the breeder may sell cattle in the market, at a price which depends on how many cattle he sells.  If Y represents the number of cattle which are sold in a given year, then the Price, P, is given by the following equation:

       P = 200 - 0.2Y,        0 ≤Y ≤ 1,000

Start at the end of the actual decision process and represent the size of the herd in year 10 as x10. The herd is to be sold at $150 per head at the beginning of year 10 and consider f10(x10)= 150 x10.

Assume that the breeder plans to sell his entire herd at the beginning of 10 years from now and retire.  Determine the optimal strategy (of breeding and selling in the market place) for the breeder over the next ten years using dynamic programming, so that his profits are maximised at the time of retirement.

Posted Date: 3/9/2013 12:26:48 AM | Location : United States







Related Discussions:- Determine the optimal strategy for the breeder, Assignment Help, Ask Question on Determine the optimal strategy for the breeder, Get Answer, Expert's Help, Determine the optimal strategy for the breeder Discussions

Write discussion on Determine the optimal strategy for the breeder
Your posts are moderated
Related Questions

define perspective of managerial economics.

Nonmetals tend to gain electrons. A-Metals tend to lose electrons. B-Atoms have the natural tendency to C-fill their outermost shells. All of the above. D-

What are the economic implications of income inequality? How can economic theory be helpful to analyze the causes and impact of income inequality? What are the concerns and how the

GOOD GOVERNANCE TO ENSURE IMPLEMENTATION OF ECONOMIC POLICY:  Government is very sensitive to the expectation of the people and sincere efforts in this direction have already

2) Proctor & Gamble (P&G) and the Lever Co. decide to form a laundry detergent cartel for future sales in Europe. Lever is more efficient than P&G. a)illustrate graphically how the

Criticisms of World trade organisation:   There are critics too of the WTO. It is believed that the WTO will emerge out destructive of biodiversity and people's livelihoods by

#question.case study of bain limt price theory

What is ceteris Paribus?  Ceteris paribus is a Latin phrase, literally translated as "other things the similar," and usually rendered in English as "all other things being equa

PARAMETERS FOR ASSESSING ECONOMIC REFORMS: Let it be clearly understood that liberalisation, privatisation and globalisation are means with the help of which the growth proces