sol for 88-92

it is given that the value of each cow's production is V(n)

for 1 cow it is 22 rs

for 2 cows it is 18+18=36 rs n so on

sol 88. for max profit MR=MC

at n=4 the profit max condition is satisfied (we have to take descrete units)

each cows production value is 12 and mc=11.

sol 89. we have to max the difference between TR and TC

for n=1 TR-TC= 22-11=11

for n=2 TR-TC=18+18-22=14

for n=3 TR-TC=15+15+15-33=12

chek for all values of n

so n=2

sol 90. in equilibrium 4 cows will be purchased

TR-TC=12*4-11*4=4

sol 91. cnt undrstand

sol 92. after tax total cost will be 21 per cow so only 1 cow will be purchased. tax revenue is rs 10

Akshay Jain

Masters in Economics

Delhi School of Economics

2013-15