29 According to the Coase theorem how is an efficient outcom

29. According to the Coase theorem, how is an efficient outcome reached? a Interested parties can reach an outcome in which everyone is better off through private b. The outcome reached through private bargaining will be inefficient. c. Interested parties will need an arbitrator in order to reach an agreement that is efficient. d. The government will participate in the bargaining process 30. When is reaching an efficient bargain difficult? a. when the externality is large b. when the number of interested parties is large c. when the externality is negative d. when the government becomes involved 4 Short Answer (20 marks) Answer the following questions based on the graph that represents JR\'s weekly demand for ribs at Judy\'s Rib Shack. 1. a. At equilibrium price, how many ribs would JR be willing to purchase? b. How much is JR willing to pay for 20 ribs? c. How much would JR\'s consumer surplus be at the equilibrium price? d. At the equilibrium price, how many ribs would Judy be willing to sell? e. How much must the price of ribs be for Judy to supply 20 ribs to the market? f At the equilibrium price, what is total surplus in the market? g. If the price of ribs rose to $10, what would happen to JR\'s consumer surplus? h If the price of ribs fell to $5, what would happen to Judy\'s producer surplus? j. Explain why the graph shown verifies the fact that the market equilibrium (quantity) maximizes the sum of producer and consumer surplus 13 12 10-

Solution

29. According to the coase theorem how is an efficient outcome reached.?

Ans : A Interested parties can reach an outcome in which everyone is better off through private bargaining.

30. when is reaching an efficient bargain difficult ?

Ans : A Reaching an efficient bargain is especially difficult when the number of interested parties is large because coordinating everyone is costly.