Start . myUMBC Pearson\'s MyLab & Masterre ×y@ DoHomework . Na nal Sube CSecure

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Start . myUMBC Pearson's MyLab & Masterre ×y@ DoHomework . Na nal Sube CSecure https://www.mathxl.com/Studen 101 Principles of Microeconomics (Fal Homework: Problem Set- Chapter 16 Score: 0 of 5 pts Text Problem 1.4 A treatment plant dumps polluting chemicals into the Twine River. Thousands of ciltizens live along the river, and they bring suit, claiming damages. The court is considering four possible solutions Comment on the efficiency and/or equity of each a. Deny the merits of the case and affim the pollutor's right to dump. The parties will achieve the optimal solution without O A. Efficient outcome is hindered by the 'hoo-rider problem. O B. Equitable with a smaller number of claimants. C. Efficient outcorne is hindered by the "drper-the-bucket problem.. O D. All of the above O E. None of the above. Click to select your answer and then click Check Answer esc F6 F7

Explanation / Answer

Private individuals will reach the proper outcomes by negotiations regarding externalities, as per Coase Theorem. But, this may have be problematic because it initiates a ' free rider problem' , as not all the individuals will be willing to convince the company because everyone stands to be benefited regardless of the effort put to convince the company.

Hence, Option A

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