Dick owns a dog whose barking annoys Dick's neighbour Jane.Dick receives personal benefit from owning the dog and Jane bears a cost of Dick's ownership of the dog.Assuming that Dick has the legal right to keep the dog, which of the following statements is true?

Question

Quizplus · Accepted Answer

For a private solution to be possible, the cost to Jane must exceed the benefit to Dick. This is because if the benefit to Dick exceeds the cost to Jane, Dick would not have any incentive to negotiate a solution with Jane. Therefore, option C is correct. Option A is incorrect as a private solution is not always possible. Option B is incorrect because it assumes the costs and benefits must be equal, which is not necessary for a private solution to be possible. Option D is also incorrect because it assumes that the benefit to Dick must exceed the cost to Jane, which is not necessary for a private solution to be possible.

Dick Owns a Dog Whose Barking Annoys Dick's Neighbour Jane