Nine Friends Who Love the Beach Decide to Pool Their

Multiple Choice

Nine friends who love the beach decide to pool their financial resources and equally share the cost of a one-week house rental on Nantucket. Suppose that the beach outside of the house becomes more congested when the nine additional people join the other beachgoers. Which of the following statements is not correct?

A) Use of the beach by the nine new beachgoers will yield a negative externality.
B) The town can reduce the congestion externality by raising the fee to access the beach.
C) An increase in the fee to access the beach could be viewed as a corrective tax on the externality of congestion.
D) Each of the nine friends would have been better off staying at home.