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 $ on the victim. Suppose that there are two potential offenders, one who gains $ from the crime and one who gains $ Assume that the probability of apprehension is fixed at 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 $ Will either of the offenders commit the crime? c Calculate the optimal harmbased fine and show that it achieves the efficient outcome. d Calculate the optimal benefitbased 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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