In Recent Years,individuals and State Governments Have Sued Various Tobacco

Multiple Choice

In recent years,individuals and state governments have sued various tobacco companies to compensate for illness and injury allegedly caused by cigarette smoking.Courts have awarded millions of dollars to victims in these cases.This product liability law:

A) encourages firms to ignore safety issues when developing products.
B) creates an incentive incompatibility between producers and consumers.
C) encourages incentive compatibility between producers and consumers.
D) is the only way to achieve compatible incentives when consumer safety is at issue.
E) forces firms to declare bankruptcy and to default on bondholders.