Answer Happy

3 Cattle Grazing Suppose a plot of land is used for grazing cattle. The cattle are used in the production of beef. Cattle ranchers on the land have the following production schedule: TP(q) = 90g - 5q² = = where q the number of cattle grazing on the land, and TP is measured in pounds of beef produced. Let the total cost of managing this herd be TC(q) = 10q (so MC 10). For simplicity, assume that the price of beef that the the ranchers produce is $1.00 per pound (i.e. total product=total value). = A). Determine the equilibrium level of cattle grazing when the range is open access to any rancher. (15pts) • B). Determine the optimal amount of cattle grazing when the range is privately owned. (15pts) C). Graph and compare the open access and private property equilib- ria from A and B. Your graph should include AV, MV, and MC. This should bare an uncanny resemblance to a model we've constructed in class. (15pts) • D). What are the rents from private ownership of the land? What are the rents from the land when there is open access? (15pts)