Question

The following table displays hypothetical annual total costs and total benefits of conserving wild tigers at several possible worldwide tiger population levels.

a. Calculate the marginal costs and benefits.

b. Given the data, what is the socially optimal world population of wild tigers?

c. Suppose that tiger farming is legalized and that this has the effect of reducing the marginal cost of tiger conservation by $\$15$million for each $2,000$-tiger population increment in the table. What is the new socially optimal population of wild tigers?

Short answer

(a) The marginal costs and benefits is $8000$.

(b) The socially optimal world population of wild tigers is $8000$.

(c) The new socially optimal population of wild tigers $10000$tigers.

Step-by-step solution

Introduction

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Explanation(a)

a. A table below provides that incremental cost benefit with wild tiger restoration equations:

Marginal cost Equals Benefit (a)

Determine that we've been possible to accomplish greatest success for one mixed racial organization, given

Explanation (b)

b. Its equilibrium point will be where the cost and total gain both comparable. It's what transpires once the potential reward and investment remain comparable $8000$tigers.

So when potential profit nor expense are equal to $\$25$, which occur every $8000$tigers.

Explanation (c)

Is if expense of $2000$tigers drops by $\$15$million, its unit benefit per $2000$tigers decreases by $\$15$million. Is how a redesigned pattern could emerge:

That can be the new perfect posture$10000$tigers.