題組內容

II. 簡答題 (共 10 分)
Lake Union has a polluting firm on its shore. For every toy that the firm produces, it creates some pollution to the lake. The market price for the toy is $100. The private costs of production and the external costs created by pollution are listed in the following table:

c. Assume now the residents around the lake can costlessly negotiate with the firm. In addition, the court's decision still stands as in case (b); i.e. the firm is not liable for the pollution it creates. If the residents offer some compensation for the firm to produce at the socially optimal level, what will be the range of payments that residents may offer to the firm? Explain. (4分)