3. Suppose that, along a river, there is a paper mill upstream that discharges pollutants into...

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3. Suppose that, along a river, there is a paper mill upstream that discharges pollutants into a river used by a downstream fishery. b) What is one of the main conditions that must be satisfied in order for private bargaining between the paper mill and the fishery to result in the socially optimal level of production? If the conditions noted in part a required for the Coase theorem to hold are satisfied, will the socially efficient outcome be reached if the property rights to the river are given to the fishery? What about if they are given to the paper mill? Will the paper mill be equally well off in either situation (i.e. regardless of to whom the property rights are given)? 3. Suppose that, along a river, there is a paper mill upstream that discharges pollutants into a river used by a downstream fishery. b) What is one of the main conditions that must be satisfied in order for private bargaining between the paper mill and the fishery to result in the socially optimal level of production? If the conditions noted in part a required for the Coase theorem to hold are satisfied, will the socially efficient outcome be reached if the property rights to the river are given to the fishery? What about if they are given to the paper mill? Will the paper mill be equally well off in either situation (i.e. regardless of to whom the property rights are given)?

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The Coase Theorem and how it applies to this scenario a Condition for Efficient Bargaining One of the main conditions required for private bargaining ... View the full answer