Author Question: If the quantity of jelly beans supplied is represented by the equation QS = -20 + 4P then the ... (Read 97 times)

eruditmonkey@yahoo.com · **on:** Jun 29, 2018

If the quantity of jelly beans supplied is represented by the equation QS = -20 + 4P then the corresponding price of jelly beans is represented by the equation

A) P = 2.5 - 4QS. B) P = 0.25QS + 5. C) P = 4QS - 80. D) P = 0.5QS + 80.

Question 2

How can external costs be eliminated by assigning property rights?

What will be an ideal response?

bimper21 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

B

Answer to Question 2

The existence of a negative externality means some group must bear some of the costs of a production or consumption activity for which they are not involved. The Coase theorem implies that assigning a property right to either the group generating the externality or the group bearing the externality costs will eliminate the inefficient allocation of resources. The Coase theorem applies if the number of parties involved is small and if transactions costs are low.