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If Firms Must Pay Full Liability for Accidents Plus Punitive

Question 58

Multiple Choice

If firms must pay full liability for accidents plus punitive damages,then


A) the private costs of firms' activities will be equal to the social costs.
B) firms will have an incentive to make efficient choices.
C) social welfare will be higher than if no punitive damages were assessed.
D) firms will undertake less activity than would be socially optimal.

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