Application 2 (20 pointa) Biological pest control has high foed costs associated

Question

Application 2 (20 pointa) Biological pest control has high foed costs associated with machinery and predator rearing: tarmers coxperience substartial "learning-by-doing': and farmers aloo depend on 'retwork externaltios information gained from felow farmers and exctonsion agents. Finly, if neighboring farmers are soraying pesticides, this will an indlividual farmer using biological methods that looks Ik aso kill of natural predators. Given thase fectors, assume we can write an average cost function per ton of output for Whare: Xo s tons 1Fil in the chart balow (s pts of biological production in the region; Xg is tons of chemical production the regioo and xb is tons of the farmers production 50 50 100 800 600 400 200 100 500 1000 1000 1000 b) 100 2) Suppose that chemical intersive formers have constant average costs equsal to $95 per ton, and that prices in this market are driven down to the cost of the lowest cost producer. Define a long run equliorium as one in which there is no incentve for entry or soxot by one more farmer of either type. Consider 5 soenarios isted below and describe which of the follawing are long run equlloria and of these, which are stable equilibria (10 pta)? a 16 biolegical farmens each producing 50 tons. No chemical farmers. b. 12 biological farmers each producing 50 tons. 5 chemical farmers each producing 100 tons d. 4 bioiogical farmer producing 100 tons. 10 chemical farmers each producing 100 tons d. 2 biological farmer producing 100 tons. 10 chemical farmers each producing 100 tons e No biological farmers. 10 chemical farmers sach producing 100 tone 3 Which of these is the most efficient outoome 12 ptsj? In the iate 1960s, atter catton pests developed pesticide reaistance, cotton growers in Texas successfuly made a shit to biologiocal pest contro methiods, with govemment infrastructiure support (predator rearing, oducationj being crtical in Mexico, with o similar support, the cotton industry oolaposd. How coudd this phanamenon be explained using the cost function above (a ptsy?

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there is no any question to answer.. It May be a technical Problem arising right here.

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