Sally's cat causes Mike to sneeze.Sally values her cat's companionship at $300 per year.The cost to Mike of tissues and her allergy medication is $350 per year.Based on the Coase theorem,
A) Sally should pay Mike $400 so that she may keep her cat.
B) Sally should pay Mike $350 for tissues and allergy medication.
C) Mike should pay Sally $325 to give away her cat.
D) Mike should move.

Question

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The Answer of Sally's cat causes Mike to sneeze.Sally values her cat's companionship at $300 per year.The cost to Mike of tissues and her allergy medication is $350 per year.Based on the Coase theorem,
A) Sally should pay Mike $400 so that she may keep her cat.
B) Sally should pay Mike $350 for tissues and allergy medication.
C) Mike should pay Sally $325 to give away her cat.
D) Mike should move.

Sally's Cat Causes Mike to Sneeze