In 2011, a tsunami along the Japanese coast damaged nuclear power plants that leaked dangerous radiation into the surrounding population. If this leakage could have been prevented, given a disaster of this level, which answer would be a Coasian solution to this externality?
A) the government fining the firm which owns the power plants
B) the injured demanding compensation through a class-action law suit
C) a ban on all future Japanese nuclear power plants and the shutdown of existing ones in Japan
D) None of these would be a Coasian solution.

Question

Quizplus · Accepted Answer

A Coasian solution is a solution to an externality that is reached through negotiation between the parties involved. In this case, the injured parties could demand compensation from the firm that owns the power plants through a class-action lawsuit. This would allow the parties to negotiate a settlement that would compensate the injured parties for their damages and prevent future leaks.

In 2011, a Tsunami Along the Japanese Coast Damaged Nuclear