Which of the Following Must Be Present to Reach a Private

question 78

Multiple Choice

Which of the following must be present to reach a private solution to an externality problem?

• A)A majority of the parties affected by the externality must agree to a solution.
• B)The transactions costs to negotiate a solution must be relatively low.
• C)The total number of people, creators of the problem and those affected, must be relatively large to justify negotiating a solution.
• D)The government must approve the solution for it to be a legal solution.