A farmer agrees to give a company access to a private road on his property if the company reduces pollution of the farm's water source. This is an example of reducing an externality through:

Question

Quizplus · Accepted Answer

This scenario involves a private bargain between the farmer and the company, where the farmer is offering access to his private road in exchange for a reduction in pollution. This is an example of private bargaining, where the parties involved negotiate a mutually beneficial solution to reduce the negative externality. Corrective taxes, public goods, and cap and trade are not applicable in this scenario.

A Farmer Agrees to Give a Company Access to a Private