How might a government intervene in a market to prevent the overuse of a common-property resource,such as an ocean fishery?
A)subsidies to the consumers of fish
B)reducing the marginal social cost such that marginal social cost equals marginal social benefit,thereby establishing allocative efficiency
C)subsidies to the firms catching the fish
D)a system of licences and quotas for fishers
E)encouraging the use of larger,more efficient trawlers to reduce the marginal private cost to fishers

Question

Quizplus · Accepted Answer

The best way for a government to prevent the overuse of a common-property resource, such as an ocean fishery, is by implementing a system of licenses and quotas for fishers. By doing so, the government can limit the total amount of fish that can be caught, and ensure that the resource is used in a sustainable manner. This helps prevent overfishing, which can lead to the depletion of fish stocks and have negative impacts on the ecosystem and fishing industry in the long run. Subsidies to consumers or firms may not necessarily address the root cause of overfishing and may not be effective in limiting the total amount caught. Encouraging the use of larger and more efficient trawlers may actually exacerbate the problem by increasing the amount caught, and reducing the cost of catching fish. The most effective solution is to limit the total amount of fish caught, and this can be achieved by implementing a system of licenses and quotas.

How Might a Government Intervene in a Market to Prevent