When a production quota is used to remedy the tragedy of the commons,then
A)the production quota is set so that use of the resource occurs where marginal private benefit equals marginal cost.
B)the production quota is set so that use of the resource occurs where marginal private benefit equals marginal social benefit.
C)the outcome is always efficient.
D)all users of the resource have an incentive to cheat on the production quota.
E)the production quota is set so that marginal social benefit is maximized.

Question

Quizplus · Accepted Answer

Production quotas in the context of the tragedy of the commons often lead to incentives for individuals to cheat on the quota, as each user benefits from using more of the resource than the quota allows, despite the negative effects on the group or the resource itself.

When a Production Quota Is Used to Remedy the Tragedy