If the costs of coordination and enforcement are _______ the surplus lost to the externality, then a private solution will _______.
A)higher than; not work
B)lower than; not work
C)higher than; work
D)None of these are true.

Question

Quizplus · Accepted Answer

If the costs of coordination and enforcement are higher than the surplus lost to the externality, then a private solution will not work because it would be too costly to implement compared to the benefits of solving the externality.

If the Costs of Coordination and Enforcement Are _______ the Surplus