Voluntary agreements may not be a feasible method to internalize an externality when

Name: Voluntary agreements may not be a feasible method to internalize an externality when
Brand: Quizplus
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Question

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When there are significant transaction costs involved, voluntary agreements may not be feasible as it may be difficult for the parties involved to coordinate the necessary agreement terms and monitor compliance. This can make it more difficult to achieve an efficient solution to the externality problem.

Voluntary Agreements May Not Be a Feasible Method to Internalize