Consider a Local Factory That Pollutes a Nearby Stream

question 107

Multiple Choice

Consider a local factory that pollutes a nearby stream.Local fishers may be unable to negotiate a deal with the local factory to eliminate the negative externality because:

• A)the fishers' cost will never exceed the factory's benefit from polluting the stream
• B)the local law gives the factory the right to pollute
• C)the cost of coordinating the fishers into one bargaining body is too large
• D)some of the local fishers work at the factory

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