Suppose that ranchers can buy up to a collective total of 200 cows and run them on the open range. The value of each cow after it has grazed is given by V= $2000-10C, where C is the total number of cows on the range. The cost of buying each cow is $1000.
a. What is the producer surplus in a perfectly competitive equilibrium?
b. What number of cows would maximize the societal surplus from the ranching industry?
c. What tax would need to be imposed on each cow if a benevolent government sought to maximize the social surplus from the ranching industry?