What is the socially optimal number of expeditions

Reference no: EM13219750

Montana is home to a number of firms offering wilderness hunting experiences to wealthy city dwellers. However, the profits of such firms depend on how crowded the "wilderness" is and how many deer are available. Thus, each additional hunting expedition on a given weekend reduces the total profits of each firm. Suppose each expedition costs $1000 to the firm leading it. The firms could instead lead no expedition and accept donations from a pro-animal-rights group of $4000 per weekend. (A) (B) (C) (D) (E) # of expeditions lead per firm per weekend/Revenue per expedition/profits per expedition ($/year) [revenue-cost]/total revenue - cost] Total hunting profits (A) * (C) Marginal profits from hunting ?(D) 1 10,000 2 9,000 3 7,500 4 6,500 5 4,000 How many firms will privately choose to lead expeditions? What is the total income for the five firms? What is the socially optimal number of expeditions? What is the total income if only these firms lead expeditions?

Reference no: EM13219750

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