What are outcomes two different property rights regimes

Assignment Help Microeconomics

Reference no: EM133950591

Assignment:

Consider a pollution problem involving a paper mill located on a river and a commercial salmon fishery operating on the same river. The fishery can operate at one of two locations: upstream (above the mill) or downstream (in the polluted part of the river). Pollution lowers profits for the fishery: without pollution, profits are $300 upstream and $500 downstream; with pollution, profits are $200 upstream and $100 downstream. The mill earns $500 in profit, and the technology exists for it to build a treatment plant at the site that completely eliminates the pollution, but at a cost of $200. There are two possible assignments of property rights: (i) the fishery has the right to a clean river and (ii) the mill has the right to pollute the river.

a. What is the efficient outcome (the maximum of total joint profit)?

b. What are the outcomes under the two different property rights regimes, when there is no possibility of bargaining?

c. How does your answer to (b) change when the two firms can bargain costlessly?

Reference no: EM133950591

Questions Cloud

How does donabedian''s model support catastrophically injured : How does Donabedian's Model support catastrophically injured patients receive consistent quality care regardless of their demographics or geographic location?

Create a gantt chart for your hypothetical clinical trial : create a Gantt Chart for your hypothetical clinical trial project using ten project activities of drug/device life cycle project or Regulatory Affairs Project.

Create hypothetical clinical trial project using ten project : Create a hypothetical clinical trial project using ten project activities/milestones of the FDA submission for a drug/device life cycle project.

In what ways did preparedness and planning fail in situation : In what ways did preparedness and planning fail in this situation? What improvements should be made to improve the triaging and prioritization of rescue?

What are outcomes two different property rights regimes : What are the outcomes under the two different property rights regimes, when there is no possibility of bargaining?

What percentage of women who have a c-section go on to have : What percentage of women who have a C-section go on to have a vaginal birth later Group of answer choices 10% 35% 50% women who have a C section cannot later ha

What action would you anticipate a physician to order : What action would you anticipate a physician to order to discover what electrolyte imbalance is present?

Discuss ethical issues involved in international business : Discuss in detail any three ethical issues involved in international business.

User Account

All Pages