Suppose that legally, people own the right to clean air. That is, it is illegal for factories to emit toxic gases into the atmosphere. (Or, in other words, the right to clean air has been assigned to citizens rather than factories.) Thus, legally factories would need to either abate pollution or pay people for the damage to the air. Either case would be expected to internalize the cost of pollution and reach an optimal level of output. Which of the following is the most likely reason that private markets may not reach this optimal solution? a. Transaction costs may be too high. b. There is no incentive to have clean air. c. The assignment of property rights is not efficient. d. The assignment of property rights is not fair.

Joint cost cheyenne, inc. produces three products from a common input. the joint costs for a typical quarter follow: direct materials $45,000 direct labor 55,000 overhead 60,000 the revenues from each product are as follows: product a $75,000 product b 80,000 product c 30,000 management is considering processing product a beyond the split-off point, which would increase the sales value of product a to $116,000. however, to process product a further means that the company must rent some special equipment costing $17,500 per quarter. additional materials and labor also needed would cost $12,650 per quarter. a. what is the gross profit currently being earned by the three products for one quarter? $answer b. what is the effect on quarterly profits if the company decides to process product a further? $answer