Calculate the marginal costs and benefits

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Reference no: EM131145043

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

Population of	Total Cost	Total Benefit
Wild Tigers	($ millions)	($ millions)
0	0	40
2,000	25	90
4,000	35	130
6,000	50	160
8,000	75	185
10,000	110	205
12,000	165	215

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?

Reference no: EM131145043

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