Railway Engines Create Sparks,which Sometimes Set Fire to Crops Planted

question 66

Essay

Railway engines create sparks,which sometimes set fire to crops planted near the tracks.A large number of farmers are affected,and transactions costs prevent the farmers and the railroad from negotiating bribes or side payments.The price of railway service is $250 per train,and each train causes $50 of crop damage.The accompanying diagram shows the relevant market for railway service.

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Definitions:

Probability

A numerical gauge on a scale from 0 to 1 reflecting how likely an event is to occur.

Asia

A continent located primarily in the Eastern and Northern Hemispheres, known as the largest and most populous continent.

Deck

A platform, typically outdoors, attached to a building; or, a collection of playing cards or slides used in a presentation.

Chances

A synonym for probability, focusing on the possibility of a particular event occurring.