ECON-200 Lecture Notes - Lecture 17: Qqq, The Anatomy Of, Production Quota
Document Summary
Three methods that can help us achieve an efficient use of common resources: Solution = convert common resource to private property. Owner faces same conditions as society faces. User of resource will be confronted w/ full cost of using it b/c they either own it or pay a fee to owner for permission to use it. The msc = mc = s = efficient equilibrium. Not always feasible b/c difficult to assign some property rights (very high cost) + emotional objection to assigning private property rights (public resource owned by private) Production quota = limit quantity of a good that may be produced in a specified period. Quota = allocated to individual producers so each producer has it sown quota. It is in every fisher"s self-interest to catch more fish than the quantity. Marginal cost is not the same with all the producers permitted under the quota.
