Who actually pays for an adjustment that remedies an externality will be determined by

Question

Quizplus · Accepted Answer

The party who has the property rights will be responsible for paying for the adjustment that remedies an externality. This is because they have the legal right to use their property as they see fit, but they also have the responsibility to take into account any negative effects their actions may have on others. By taking on this responsibility, they are incentivized to find ways to minimize the negative externality or pay for the cost of remedying it.

Who Actually Pays for an Adjustment That Remedies an Externality