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Business, 18.06.2020 22:57 6lost6soul6

A village owns a common pasture where villagers graze their sheep. The cost to a sheep owner of owning and caring for the sheep is $3. The total revenue from all sheep on the common pasture is TR(s) = (23-s)s, where s is the number of sheep on the pasture. The local government notices that total profits from the pasture are not maximized if the villagers are allowed to pasture their sheep for free. The government decides to allow a sheep to use the common pasture only if its owner buys a sheep license for a price of $t. To maximize total profits (of villagers and the government) how many licenses should the government sell and how much should each license cost?

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