Chad's maple tree hangs over Amy's fence and drops leaves into her yard each autumn.The benefit to Chad of lower utility bills is about $300.The cost to Amy of having her lawn cleaned and reseeded is $350.Based on the Coase theorem,what should result
A)Amy should pay Chad $325 to cut down the tree.
B)Chad should pay Amy $350 to have her lawn repaired and cleaned.
C)Chad should pay Amy $400 to keep the tree.
D)Amy should build a higher fence.

Question

Quizplus · Accepted Answer

The Answer of Chad's maple tree hangs over Amy's fence and drops leaves into her yard each autumn.The benefit to Chad of lower utility bills is about $300.The cost to Amy of having her lawn cleaned and reseeded is $350.Based on the Coase theorem,what should result
A)Amy should pay Chad $325 to cut down the tree.
B)Chad should pay Amy $350 to have her lawn repaired and cleaned.
C)Chad should pay Amy $400 to keep the tree.
D)Amy should build a higher fence.

Chad's Maple Tree Hangs Over Amy's Fence and Drops Leaves