—_—+-Gselutiom 9 the LB _£ meyemmernt a The chicago ~__| Regulation —accordi ,e Conceive ecuxed oy —paliticeily piective _imbexest groups al Zam BS,Date: 5 | ee ee ee A oo oe ete 5 ae __| dhe i iI sth GAS the _absemce of; _empox.ceable propexty rights. < 4) Command amd tem tro inte yem Hor Coase Counter = dn tuitive approach, Cala. bresi’ Cost 2 accidents: = UDRXESE cos cident _@uido Cala bresi [op mas whe pines _ystemaite —tternpt by _a_@_ | Nawyer to _exciminns law of —boxks pro: z erespective. According ——to isn the Cost of _Qccidents _could _be As. He party, that could avoid __tine sminaimiged accident ok th: leact Cost _woa: held iable bor the lass cheapest cost avoidey rate a cs2at | procedural rule: could be» given its -yefowm.. Possnex demonstrated + tock inmple economic comnce prs — coula__be _useel ko + ama y%e al axeas Of Law. He has shown thet —marny legal dockvin amd 2 enomic explaination ornd. atiomatisation His _“ Economic—ana ysis op laun!' _attexn ets theses of legal _doctsine: usiang the concept of —ecomaxait eiyictency He advanced 4+ne cidicol toesic» tat the Fell | iirngarsbenosabioingiee ay oabeiemsha sey ose SET* Jac “ |__Sa iy ___— would ike to buy thet car. Suppose Tock aks _| for o price of _4.1p,000_, bu soil be willing to accept am. apie Sf —4-2000- Ints means: Tack would 1 000 but ilLinag to pay © | as much as $9000 , Herve agaim iF cam be sata Haot— | Salty would peel better _ovsning the Car _thoam havima — | amy other thing for 49000 | we have o« range $¢000 - 48000 that would leave Obs» A price. aithinn tni< xomge noutd be ioacieasimg etisaes thik ssp ob |_ prices ig reffered os the Compact cutie ——>+dhe @xchamge Fr the Caw 0% the price belweey __| $000 —_ 49000 would _be __pareko —Stspectia ore Boe ¢__takes_place por $2500, [amd we comsicter -vmckjusting te price. — dy —voe (oy 8.100 _moxve _te_Satty. Bt both _Hne__Cases_amy, smovemenk —_fyrovm__4 2500 | owt leave ertivex Tack “cas —_Seullyy —_eomrs.¢—f Of [y--—lwheno the resources ane _oliivideol _Stucl_& 0.4 Hoakt they, aC 6 cow ithout | ak teask one party _eelimg users spy _the —orrig.ianol- distripubiom is said te be Pareto _epkiennal. __| Pareto epftcrerrcy as alco bmatom a8 _thenry _f ft inst best. AU poimis on. the PPE _C Procuctiom fosibilitres fYontixe) i |iis paveto efftefent Au_the paints —_arre allocative Ly ehptcienk.=o 1] Allo cotive —efpftcreney—*= ~_| Aocative _e}picien cy —eccuns—tehen the —value Hoat_ [-comeurmnere place om a —-gnedG)—Seruice 28h keke [im the _ price they —asrce_sailting—lo_pay-)—Cquais—th —}Cort of, the _ fare kort _nesounces used _up_im produc 1] Market patce = Marginal _coSt.O-—Suep ply => P= MC Mc rhea a ' i I DB a Kaba = Hicks —ebbicsemcy i= u Alia lenoten ag wealth maxt mination —|Bhase_imotividualt made better of} by the policy Gd —}Shamge _woutc have tobe made —_Supptare Hy — better of that they Cold _- compensate those —tho— ore mcd @__usorxs @ opfp + _ahe _key ere ts —_thak the __ Compensation is _* potembrat mot achat.eo | Discounting —annsl Present — Mele —E————— fee in a pg | O%Scountinng —imuolus es__veclueing—the —_walue op a. | future payesmnent too corte b ameunt Using |g _ctscount —_C__ientestes 366 b@ ee ee fee sIhe_ictec i tak the - dlefarncloro-: imsuorance i clisounted Cis less) becouse Cam them earn _mtexeS} _on_ tha} ameunt Gand | uty ewemtwatiy rece due the peal 25.0. Risk Avestan <= SISA RES Risk aversion is typeicatly braced bo tHe ols nishir Qt comes imo ploy _tnern _ecoma mics is applred to Lavo. ov _evanmmple inn _the Cage —_of— product lo biulay. be held _Lable _fov _the though _we now they — (the good . Ay _ y —_— they one willing. _ko__pay_ 2 | Shoutel smanukachure rs. injuries fo _comsurm.ers _e ve" ama y— Sivm ely xaise tne price © fsk__ av nmay__smake —Sence because.eo a E F 3 » re: i €SOUNCE Costs, hemefir , eke Ecomomics agjers ox _althevernt _amel_extevnal _presper tive sm__legal problems which can, hel neu imsfo\ts, +—Yeveol new __relattan ships ama perhaps explain more _ {Clearty Hoe laus anal be. fect © jRomeiol Coase += He guve Coase theoxern.Sxay Recker D:| ecomormic omatysts of _evime radtea. ae Am} luenne: of —_ecomarmnic. smarket be hai d Economic amolysis og torts. Positive anol _Novmmative _eromarntc appalusts og Noymartve 2 hewiiit ought lo be tyne aoe Positive 3 how te is + | ceomomnic —amneu.ysis —of lays seeks to _ansunest—> = a) ij what ove the - efbecks of legal yales oN) Hhe be hawiou of —velave Me actors 2 CPositive) | pre whese elects of legal sules “Socially dcsiva ble) Comormatiye) Crowne\ a A Teraenabs—apnal- Habe —tyrapanavantis——Sf oe ey re Oo opted —S0ashens— Socal __| welfare e@emmnosnaits ; 7 clesi ra bility. Za Mutter y- share ef —Qxean— Ihe dectatom im _‘mmulley —_w~ Oregon yvesulted ty _athey _ cass annd @ fake laws. related. _to — eRe wooxtke hos waar Comnctieroms.=o | ; | | ae eee ape eee eae Sena pessoa. ecsmeemis—wasioaning a Ex- ante te. lookimg poxmonsd Ecomarm. CE x= amte) + Fexuard leaking Legal CEx= post) Backcanand looking : who acted right ¢ ~ dampock Hop _eppixamnakive __| wovomng 2 ushose ocign ks actions. Wwhak epjeck cot are yiolake cl 2 tate rate awe inn futerre? 3S *t roe. policy, oxiembed Qe loous imta _t5elj-ave. Dependent on theories >, _hainmess amd righ | eget pose isnn ___}-—based om \ego.\ _{tanski tutions cyrs'm. “Asem amid lego _ockivt> monerely mer Me eon rer > Penpeck comes! (ose: GG) A mane polis! oil lo__'maximiieprogits by {Setting ie 2 top Teen ie here. MR = Mel j i = Mc Mela“manwet,-.o__smonepeliit _Conm paxced_10_cormpe lative — aml __rectuoes—oukpas —imen eases ertce— Pex poet Com peltvorn 3. os___smough may hee > ee | : “ celottvely Lox, —___— 2 | ama _pixms conn _—_emtew ol__exte 4né _Touket __ 2asthy, Comsusrn evs _Cann, Choace _ where they _-bus__thei-r | Gouds amet Services. Com pamies jus ease —emaugh- progit—te_Stay__tm beu'sones. noone. e me Ac hy P f b= Ae = Me x io 2 = Perez ae. ' \ RIT, ! el LG y a, & L \ % Da: iw PeMeo Pee a) The demand curve _}s__pertyecty elas toc 1 Maximmises progit ate MR» Me ‘ (R= Ac!Perpect casnapetition has _hosiysntal demand cume @ 7 » A —+4 —— a | 2 Ss | D 2 ie ih yk a s afte ea —enazte oo CS ag) Lowest price = peor kus ty { marginoct Cost => P= Me rN monopoly price i P>Mc K ae : Ly | @ne Dene! ep ==. iN 4 @= a er 2 a a ett \ - iO et & «A ato On DEAR ache DS At the mm tcipsinot oy demarod —eusrve. elas biel ty. ied amd _Alnove phot 4. amd _belor <1 Momopoalist sMaximises revenue when MR = O- Co he fixes P omd @__at that poirot ‘ i a he reduces oubpuk to _-Q' inncoreages fm! TP etasneiep unit etiney te >on 61 (Bois the )__| eoniny —spntnont poet Sd — Sai P i ARs Mc [ex Ke ose Q Ponun NBS.Corn peti Hon. amtenable “= Posner: brings P clover —jwsay P@ = Ca revenue, i-&. Mo _progits. rf y aN Jaa et ABS : cok c S Daou cael LN : GMD AAA AR =DNow, a mein player. ___—_| te__q Same wae embexs _arndl_oukput im careases of —_ome__moxe enn: to Playex_imeneases _outpik te Qy amd. rings __fne eens (thei Samos + _moxepalies conte. im —the— Seeds —o} f Me Qa mR D=AR 5 whem Cost is M 2 apacl &._ when. the price and —_oturpiet crt ___ cost pallies to My ne [eq uctiibs?usn point —elnmges to —_th¢—_peinah—sOneie-——|-£) dg, xerpecktsely — MR porn... Haak poimk—,—pmce—amol__autp Q, Amey wR dy DO Here it carn__be__Seem__tnat__oa__deerense ia demar does__mot—_reduce __bi's_prtce, it__omly__-recluces the — buteut. very DB _curve _nas__a_ Contes pometing MR Cory @, Static —v- Rysogon te _3= Stahtc compet tion. smamipests itself? __ the jen. © Of ——muttple__proudders 6p _@wistinng_Proctucts after edt —ste_lowe_pmice_»_og-bem__maamy _Umirm proved products — Dynamic competition im _Telies upon _imnovation— — fe produce news __prvrodueH. __amn__prrcacess._amnd_—Pi'e2 — —yrecluckioans ofa. Substantial mag mice, 9b _imarores— ——the__productaritys the avastabitihy of —mew—goeds—amdl__ ~—j—Serutees ams __mare __gemereuly—_imen-etises —_ComSuamex + toslfare,FF -— | Ecomommres of Scoie $= QO key _ ame unk oy tne hare. im _the __-mavket ___| produces lave quam ratces fm smn. mnt PTO bth | thus, shew a _nete _exgarniSabten—slesssles —ta emtex the marvket, it ha te produce Im __lancye. ____|_quambittes to veep dts cost _leto im _com porrtstom be tne market _yulers Go | Qead weigink Loss z=a | Rent seeing fakes om = 2 king, omy perms = Inichetenn and ape penn__bramspexs anand _Subsicires _lyrom_ the ——_{—gorcesm men | _lawos _Hnak _snncut S ws nal ke__the_maxkel reg Corn petitive , le08e _emfporcemmesnt—_oly—_Sristiong loros ___| ame Statute 4 0 thal allots _CO> operation that take aduambage 4, other She Setiey hers toncemtive _Im__ionere ore _‘Taarvke t Shave He cammoat _ho o by recitecimg _prrrces ag tee fo-cbicen. So _ he *ttes (© wake ns pxcoduek nay a the Met yin creasing it Quality pxoutching bether Sesiitce eb. _A point Comes where the Setlexs smn ang imal coat rise to the level of, _pixed _pxtce tort Hoe. as phe x Pl i Although ne competitive _pracest sail _ inocrrente the ‘ ronan — | eqs teil wicehd i kart the aay eg, Civil oergnaubics boorrd preven tect _botn prise : nett i aked — _amel tne _Creakionn sj —_meco- trum aixumnes 3 a a oe See aemet oaadinonal Cost < MC[ é tA A Elasiceity of demgind of —the —Sndusteyt | _theve are aurailable _cubstikates _, ik is less utcety | Hoot one innolivictuol —_fyfaaoa ino nk ioncls stey Bt | aiarine tra tlanery igeetitnats ni psn siliei® » poweevtisnecs prc: | Elastectts i —_Supety == is x so duc xciponncl to of, a product _y_imceasing the | U a : ; equal, fyivrms tot th "9 Smourket Shave toi terol to howe oewhen eMivy ts. absolukly free amo the exit i _____|€utievly _cectices , tem the. marvhet— becamer Conicstet L=p- Me « P= Pre B Mc = Masvgimal cost. o Nexkiadebl=—Hss-chmam. imetex Cutt r t= ———{ mu ply moe + ~O,—_fistams__usith squares af nei _smaxke: ———}—Shasre 2 Spins ton 8 topes st ee AA Te) 1S — SCloy) + 10 (s¥) =>__5 » oy? + 16 Cs)? I. =) S00 + 200 = yy : 20. t SO Crown FARE_ 1909 = 1800 = moderate moarxket_comeentyobion 2 \g00 = tnigh noxket _cemeemtcotion Be 1 = ae >| A natural monopoly sts __a_speevn| case where _one _ ___| 1targe _bur'smess cam supply the __embixe__rmo-ket____) ab _a__lounex _tomag ‘Tuan. average cost _Cen-trosted ____ | qoit _amultte le provide:[paw Gd) —<——§ Yi is nefits — SOKO @ _umits ae —am_awg_co.dt— —of-C—___ —__|-Pxoclucinng—_t >| Ebpacienay —useuitol_be—imexeased—oy- __Imemearing. | proctuckton to, +1ahem 9 _amal__MC—enout be eee — Ahewe ane ture _wotiy.s—_to. Get these ig Z ome is por kne . eis tino, fim ro_ produce CQ,~@) move units a Ts __poxc_o.__teto_f2™M__to__emter _arndl snus ie cheaper fo __ine enisting ptm —le—— upply pre _adlition al —_uraiis.[ (om) ze | [iuhy ngdusat —mpmepety should be —"saylaled ae — _—5- Mane galy—paicing—t= _ | A pints a autunco|__mon opoty market has __ 9 | se commiral amd te gutake _Hne prices by —the |_tne Same imrernive _a$__Amny—_atnen— __yicon__to__ |__"mearirm ise__pr0| pik by _swestrietinng_ts ukput orn! _ |_Charging a. _higher price. | goweranment co) ann __agesney —o4—gouexsnen.enk ahi is__diome that the mature __mMomnoapolst plnes nok behave aso _smomopolitt. Pagpterno—of —Ineppiczernle —esaany $=al a ako Lower PFIEE they pea . cot: hold tothe to get a} |__the _momoapaly, smontket ar x : ts ane _Cuttormens Stour —chif-kerg_ tome | —__| Ajtey nis Player: low the NM hoch 2 acting OS et. monopoly J ralue, RB ig_otutpule GS wrectuce ith pre. | Or ett reduce ob price a _restritching _OUckpect woh couse harm lo tne Smamoapals Camm pamy | _Iiself. Mowopnly _veetuoes lia _pmtce _to__tno ——|_HMangianel co) _eppovtumiry east _Arte _tn's__poimt there is mo of _lyov_the__amomoeoly. At doer Hads So__that it Cat thaw out tine _me so_playey as its ——|—mangimel cost Cee) is _heghesc tam 2 omnd._tney Hep tedch —_ioacun tots. _fbey _¢cinunking out the new Player tne soomno ely, goes__bock to __tts__+momaeoly __ Prt. -3)—-Epptctesot _posce _Skructuve #7 —tin_prewiovs _gamphe of NM theve Me imtersect —-9—the _ptverms__AC__us__gweatoy thane _tts_mang inal _ Cost. ——-3,NM changes ok Me »—then _ their —betal revenue ____ CT R}_eottt _tecome lees tham, thei tof. Coe imcured Cte) to gro cluce the __et0cdkuck, asehigne x _Comsurnp ion ofthe produce ce ~_| MC is the pure _armoums —imensceol__loy—_Sou'eky_to_ |_Qroduce tne _prnctust, whereas fe __ho$__some. z be mene es S,—-NM cYarger ok Ac th _gives more PXObck to. NM then the +R becomes amore nam TC, TR > Ve ty Pp = Ae Sp—ik sels ab AC tk watt tmeduce the omanginel, consusmer te _scorken to. ubstt tebe prc clocks produce. | eyemthough they, cose _snste by —uoore tm — uit mot be too key bed Masxgitnal comsusme yr Lim the pre. duct $y the tones _@>_ the paces becanne-“highes ood ust ge dn sua _Sunitisle—— @)__altermoaHve fox_the, _porockuck, ' ee 4, P= he, ib teads to Tmefpacremnt su bsbike: to — b- pe(iy. aii ake sp * 7 v En kev. | use of rewards amd ___pemalttves tn _inetuce § their _ubibtky jf nM to _achioue Sever —_—___| ols. im * the goals. | Cleayty regulation atpecis behowleur ; but the Rey quesiven is hous to make the imter vewh'on— productive promokimg the achievement 04 econo objectrves OF oa emintmum cost —D-| Revenue Requirement s_ Qk comes umder _progit —cembral TR = Te + vesomable probit ———______ ti ibuismess amo te provide velo ble Jo stayin Service te has te maim tetas Wop tne aise ts Chavesnges t= .) Reguic gy aes: Qe te a time pextod _beturce them a Nt M‘s —__—_. adjuske tne _prtces _fere the _matuncod monopoly.ahe lomgen tne _ RL. _goreatex ¢s__the __,a---ms. Imcesntive ko _be _ef-feeierab. the _requlokox wont: _give_tne rake. _imescens | the smost _egfvorerat player —_uattl be e_tne bes b __ —_|_bhemejtaarn, prom _the_reg.ulairex—y $0 gcalsdeonr yy — lag imeem toues tne fiona __lo_he _smoxce—_efypacienn| 2) Cixculotory pro blero i — Rey enue. SNoxtfatle =| 4p o regulatoy over" scegulakes tne! soasmapihy —__J | them the mmomopoly tatu __fimet alkernnative Laas to oleal uritin dow anno _orep wlatidorne —__| ome. ste —eay ts __to__imemeate.. the _(2evemire ——— SEH ee electing —__the__orke— bore. —___— | -A=3__olevetoped. toa anode Fi usteoas dena —pusliet | Yoyu lotion _cexeokes am. Incentive —jor— ahe rears _to _ osc eke over invest. inn___ Capital { _ tamgivle