Railway engines create sparks,which sometimes set fire to crops planted near the tracks.A large number of farmers are affected,and transactions costs prevent the farmers and the railroad from negotiating bribes or side payments.The price of railway service is $250 per train,and each train causes $50 of crop damage.The accompanying diagram shows the relevant market for railway service.

Question

Quizplus · Accepted Answer

The Answer of Railway engines create sparks,which sometimes set fire to crops planted near the tracks.A large number of farmers are affected,and transactions costs prevent the farmers and the railroad from negotiating bribes or side payments.The price of railway service is $250 per train,and each train causes $50 of crop damage.The accompanying diagram shows the relevant market for railway service.

Railway Engines Create Sparks,which Sometimes Set Fire to Crops Planted