Question: Consider a crime that, if committed, would impose a cost of $ 1 0 0 on the victim. Suppose that there are two potential offenders,

Consider a crime that, if committed, would impose a cost of $100 on the victim. Suppose that there are two potential offenders, one who gains $40 from the crime and one who gains $80. Assume that the probability of apprehension is fixed at .5.|(a) Is it efficient for either of the offenders to commit the crime? (b) Suppose the fine is set equal to the actual harm (that is, f = $100). Will either of the offenders commit the crime? (c) Calculate the optimal harm-based fine and show that it achieves the efficient outcome. (d) Calculate the optimal benefit-based fine for each offender and show that they also achieve the efficient outcome. (Assume that when indifferent, offenders do not commit crimes.)

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