The Distribution of Rights Among Parties Affected by an Externality

Multiple Choice

The distribution of rights among parties affected by an externality:

A) hinders the ability of private parties to properly price the externality
B) enhances the market incentive to reach an efficient solution
C) determines who bears the cost of the solution but has no effect on the efficiency of this outcome
D) affects the efficiency of the outcome, but does not determine who bears the cost