Explore Westonci.ca, the premier Q&A site that helps you find precise answers to your questions, no matter the topic. Discover in-depth answers to your questions from a wide network of professionals on our user-friendly Q&A platform. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform.
Sagot :
Answer:
D
Explanation:
The activities of the chicken firm constitutes a negative externality to the environment
A good has negative externality if the costs to third parties not involved in production is greater than the benefits. an example of an activity that generates negative externality is pollution. Pollution can be generated at little or no cost, so they are usually overproduced. Government can discourage the production of activities that generate negative externality by taxation. Taxation increases the cost of production and therefore discourages overproduction. Tax levied on externality is known as Pigouvian tax.
Government can regulate the amount of externality produced by placing an upper limit on the amount of negative externality permissible
Coase theorem has been proposed as a solution to externality. According to this theory, when there are conflicting property rights, bargaining between parties involved can lead to an efficient outcome only if the bargaining cost is low
Another solution to negative externality is through the activities of charities. Charities can raise donations to limit or regulate the activities of firms that constitutes a negative externality. This is the solution employed here.
We hope this was helpful. Please come back whenever you need more information or answers to your queries. Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. Westonci.ca is your trusted source for answers. Visit us again to find more information on diverse topics.