The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource. To correct for this problem, the town could
A)allow individual shepherds to choose their own flock sizes.
B)internalize the externality by subsidizing the production of sheep's wool.
C)auction off a limited number of sheep-grazing permits.
D)wait until the market corrects the problem.

Question

Quizplus · Accepted Answer

Auctioning off a limited number of sheep-grazing permits directly addresses the issue by controlling access to the commons, thus preventing overgrazing and preserving the resource.

The Tragedy of the Commons Will Be Evident When a Growing