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1 February, 03:30

Betty's cat causes Suzy to sneeze. Betty values her cat's companionship at $300 per year. The cost to Suzy of tissues and her allergy medication is $350 per year. Based on the Coase theorem,

(A) Betty should pay Suzzy $350 for tissues and allergy medication.

(B) Suzy should pay Bety $325 to give away her cat.

(C) Betty should pay Suzy $400 so that she may keep her cat.

(D) Suzy should move.

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Answers (1)
  1. 1 February, 07:15
    0
    (B) Suzy should pay Bety $325 to give away her cat.

    Explanation:

    Based on the Coase theorem, Suzy should pay Bety $325 to give away her cat.
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