Explain why the elimination of a production quota

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Briefly explain why the elimination of a production quota (like the NYC taxi medallions) would attain Pareto efficiency but would not represent a Pareto improvement.

a. If those who are made better off compensated those who are made worse off, could the elimination of a production quota benefit all market participants? Explain.

b. Explain what could be the complexities of such a compensation in practice. What do you think (I don't know how to answer) would facilitate this compensation? Explain.

Reference no: EM133259945

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