When producers are hard to monitor and marginal costs differ across producers, _______ are an effective method to achieve efficient use of a _______.

Question

Quizplus · Accepted Answer

Individual transferable quotas (ITQs) are an effective method to manage the use of common resources, such as fisheries, by allocating specific quantities that can be caught or harvested. This system helps in preventing overuse of the resource, ensuring its sustainability, and allowing for efficient use by enabling the trade of quotas among producers.

When Producers Are Hard to Monitor and Marginal Costs Differ