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A firm can produce steel with or without a filter on its smokestack. If it produces without a filter, the external costs on the community are $500,000 per year. If it produces with a filter, there are no external costs on the community, and the firm will incur an annual fixed cost of $300,000 for the filter. a) Use the Coase Theorem to explain how costless bargaining will lead to a socially efficient outcome, regardless of whether the property rights are owned by the community or the producer.b) How would your answer to part (a) change if the extra yearly fixed cost of the filter were $600,000?
State about Production theory Production theory assists in determining the size of firm and level of production. It clarifies the relationship between marginal and average cost
Why we need to distinguish between private cost and social cost?
Long-Term Policies One long term option of tackling balance of payments deficit is export promotion . In the long run this is the best method of improving a balance of payme
Pricing Methods
Q. Explain about Regression analysis? Regression analysis is the statistical technique which identifies the relationship between two or more quantitative variables: a dependent
Limitations of Uneven Distribution of Income and Wealth Unlike the historical experience of the now developed countries, the rich in contemporary Third World Countries are not
Analyse The Method By Which a Firm Can Allocate The Given Advertising Budget Between Different Media Of Advertisement
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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
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