Q
Which of the following is not considered a transaction cost incurred by parties in the process of contracting to eliminate a pollution externality ?
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A
A. Costs incurred due to lawyersβ fees
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B
B. Costs incurred to reduce the pollution
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C
C. Costs incurred to enforce the agreement
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D
D. Costs incurred due to a large number of parties affected by the externality
Correct Answer:
B. B. Costs incurred to reduce the pollution
