Question

Suppose two neighbors share a park. One​ neighbor, Al, leaves trash in the park. This bothers the other​ neighbor, Bert. According to​ Coase's Theorem, the optimal level of trash in the park can be achieved if
A. Al is fined by the government.
B. Al has the right to leave trash and Bert cannot do anything about it.
C. Bert moves.
D. Al has the right to leave trash and Bert can pay him to limit his dumping.

Answer 1

Answer:

D.

Explanation:

According to my research on studies conducted by various sociologists, I can say that based on the information provided within the question the optimal level of trash in the park can be achieved if Al has the right to leave trash and Bert can pay him to limit his dumping. This would in term lead to the optimal level of trash in the park after a certain time because both would be leaving the same amount.

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