Montana cattle ranchers are complaining about mountain state sheep ranchers whose animals are eating too much grass on the open range.The sheep ranchers claim that the cattle are eating too much of the grass.This is an example of
A) an external benefit.
B) the reciprocal nature of externalities.
C) the principal agent problem.
D) a situation in which strict liability would be the more efficient solution.

Question

Quizplus · Accepted Answer

This is an example of the reciprocal nature of externalities, where each group is causing harm to the other through their actions on the open range. The actions of one party are affecting the well-being of the other. The situation highlights the need for coordination and cooperation among both parties to find a mutually beneficial solution.

Montana Cattle Ranchers Are Complaining About Mountain State Sheep Ranchers