What does the coase theorem suggest will take place

Reference no: EM131099310

In question 7 above, how large would the transaction costs need to be in order to ensure that no private solution to the problem can be found?

Question 7

Suppose an individual enjoys lawn care and gardening a great deal. He uses pesticides to control insects and the harmful residue drifts across the neighborhood. He values the use of the pesticides at $10,000 and the neighborhood values clean air at $15,000. What does the Coase theorem suggest will take place?

Reference no: EM131099310

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