10 logging firms use a forest to collect timber. Each firm i must choose how many trees to cut, gj. The benefit of cutting a tree is 1000 –2G per tree, where G is the total quantity of trees cut in the forest. The marginal cost of cutting a tree is 10G. Firms do not face any fixed costs. What is the best response function for firm i? 10 500 - 2j= 1.j = 19j O 9i = 7 10 1000 – 2Ej=1.j z,9 j O 9; = 10 1000 - 22j = 19j O 9; = 7 10 500 - O 9; = 9.

10 logging firms use a forest to collect timber. Each firm i must choose how many trees to cut, gj. The benefit of cutting a tree is 1000 –2G per tree, where G is the total quantity of trees cut in the forest. The marginal cost of cutting a tree is 10G. Firms do not face any fixed costs. What is the best response function for firm i? 10 500 - 2j= 1.j = 19j O 9i = 7 10 1000 – 2Ej=1.j z,9 j O 9; = 10 1000 - 22j = 19j O 9; = 7 10 500 - O 9; = 9.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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