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Livestock farmers frequently give antibiotics to their herds. The antibiotics create drug-resistant bacteria (sometimes called super bugs), making them less effective. This results in an
Livestock farmers frequently give antibiotics to their herds. The antibiotics create drug-resistant bacteria (sometimes called "super bugs"), making them less effective. This results in an externality that harms future users of antibiotics who will be using less-effective drugs. A) Using the supply and demand model, illustrate the market equilibrium and the socially optimal equilibrium, along with any deadweight loss in this situation. Explain whether livestock farmers are more likely to over or underuse antibiotics. Be sure to fully label your graph clearly. Quantity B) A friend suggests that the Coase Theorem offers a great solution to this problem. Do you agree? Why or why not? Be specific. It will be helpful to describe the characteristics of the Coase theorem
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