There are economies of scale in ranching, especially with regard to fencing land
ID: 2494903 • Letter: T
Question
There are economies of scale in ranching, especially with regard to fencing land. Suppose that barbed-wire fencing costs $21, 000 per mile to set up. a. How much would it cost to fence a single property whose area is one square mile if that property also happens to be perfectly square, with sides that are each one mile long? $. b. How much would it cost to fence exactly four such properties, which together would contain four square miles of area? $. c. Now, consider how much it would cost to fence in four square miles of ranch land if, instead, it comes as a single large square that is two miles long on each side. $.d. Which is more costly-fencing in the four, one-square-mile properties or the single four-square-mile property?.Explanation / Answer
a). If the fencing cost $ 21000 per mile, then to fence a single property in a shape of square with 1 mile sides. It costs $ 21000 per side for total $ 84000 for the total property. b) So to fence four properties will cost 4 times $ 84000 or $ 336000. So fencing 4 identical 1 square mile properties. Total area of 4 square miles, the total cost will be $ 84000 or $ 336000.
c). Suppose there is another perfect square properety with 2 miles sides. The total square mileage of the property is 4 square miles 2 mile x 2 mile = 4 square miles. Which is exactly the same area as the 4 properties with 1 mile side put together. The cost of fence is 2 miles per side property is $ 21000 per side ($ 21000 permile x 2miles )since , the property has 4 sides. The total cost will be $ 21000 x 4= $ 84000. if it is 4 square mile of ranch it cost 4 x 2 = 8 x $ 21000 = $ 168000
d. four 1 square mile.
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