Economic Analysis of Social Issues 1st Edition by Alan Grant

Exercise 2

Home Depot is trying to assemble a parcel of land to build a new superstore. There are 50 houses on the land the company needs. (The superstore is more valuable to society tl1an the houses, so the benevolent social planner approves.) Which of the following statements is true regarding Home Depot's ability to buy the land and build the store?
A) High transactions costs of bargaining with so many homeowners might prevent the superstore from being built.
B) Some homeowners might ask for far more money than their houses are worth and kill the project.
C) The government exercising its takings power might be the only possible way to assemble the parcel of land.
D) All of the above are true statements.