Using the Information in Question 30, What Would Be a Private

question 78

Multiple Choice

Using the information in question 30, what would be a private solution to the above externality?

• A)under the Coase theorem the two companies should be able to negotiate away the externality
• B)the two companies would need to trade permits for river pollution in order to achieve an optimal outcome
• C)the fishing firm could buy the fish-food manufacturing company
• D)the fishing firm should continue to make the most of the positive externality

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Definitions:

Deferred Revenue

Deferred revenue is income a company has received for goods or services yet to be delivered or performed, recognized as a liability on the balance sheet until the obligation is fulfilled.

Accounts Receivables

Money owed to a business by its clients for goods or services delivered but not yet paid for.

Insurance

A contractual arrangement where one party, the insurer, compensates another party, the insured, for losses from specific events or dangers.

Accounts Receivable

Money owed by customers to a company for goods or services that have been delivered or used but not yet paid for.