A chemical producer dumps toxic waste into a river, Managerial Economics

 A chemical producer dumps toxic waste into a river. The waste decreases the population of fish, decreasing profits for the local fishing industry by $100,000 per year. The firm could eliminate the waste at a cost of $600,000 per year. The local fishing industry having of many small firms.

a)  Using the Coase Theorem, describe how costless bargaining will lead to a socially efficient outcome, regardless of whether the property rights are owned by the chemical firm of the fishing industry.

b)  Why might bargaining not be less expensive?

c)  How would your answer to part (a) change if the waste decreases the profits for the fishing industry by $40,000? (Suppose, as before, that the firm could eliminate the waste at a cost of $60,000 per year.)

Posted Date: 3/15/2013 3:03:07 AM | Location : United States







Related Discussions:- A chemical producer dumps toxic waste into a river, Assignment Help, Ask Question on A chemical producer dumps toxic waste into a river, Get Answer, Expert's Help, A chemical producer dumps toxic waste into a river Discussions

Write discussion on A chemical producer dumps toxic waste into a river
Your posts are moderated
Related Questions
Using Total Expenditure for Calculating National Income The expenditure approach centres on the components of final demand which generate production.  It thus measures GDP

Write on one theory of profit. Profit as rent of ability: one of the most widely known theories of profit was propounded by F.A. Walker. According to him profit is the rent of is t

The market demand for brand X has been estimated as Qx=1500-3Px-0.05I-2.5Py+7.5Pz

Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs. 3 to 2

Industry Paper: As a partial requirement for this course, you will have to submit a paper on an Industry of your choice. This is a highly structured paper, which consists of: 1.


excise tax and its impact on manufacturing industry with respect to demand and supply curves

what is asset market theory theory in environmental economics?

Q. What is Marketing Economies? They are allied with selling of the product of the firm. They arise from advertising economies. Because advertising expenses increase less than

Problem 1: You are the manager of a reputed five star hotel in Mauritius and you have been asked by the director of the hotel to advise on possible pricing strategies to increa