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How might a government intervene in a market to prevent the overuse of a common-property resource, ...

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How might a government intervene in a market to prevent the overuse of a common-property resource, ...

How might a government intervene in a market to prevent the overuse of a common-property resource, such as an ocean fishery?

▸ subsidies to the firms catching the fish

▸ a system of licences and quotas for fishers

▸ encouraging the use of larger, more efficient trawlers to reduce the marginal private cost to fishers

▸ subsidies to the consumers of fish

▸ reducing the marginal social cost such that marginal social cost equals marginal social benefit, thereby establishing allocative efficiency

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Microeconomics

Edition: 17^th

Author: Ragan

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