The marginal cost controversies in 19 forty six paper and iis very like allf costs. The insight mas will argue, well, you know, efficiency requires a output up to the point of ofwhere where marginal cost a equals price. And so which should be the price of crossing an uncongested bridge, say a motor is crossing? Well, says the naive economist, it should be zero. Because the cost of putting aside the small ware and terror tat's deminimous. So that person shouldn't be charged a pricei they shouldn't be discouraged from crossing. They shouldn't want them notexa. If we force the price down to zero, as some economists advocate
Don Boudreaux of George Mason University and Cafe Hayek talks with EconTalk host Russ Roberts about the intellectual legacy of Ronald Coase. The conversation centers on Coase's four most important academic articles. Most of the discussion is on two of those articles, "The Nature of the Firm," which continues to influence how economists think of firms and transaction costs, and "The Problem of Social Cost," Coase's pathbreaking work on externalities.