Which of the following is a problem that keeps people from privately solving externality problems?
A)Each party involved holds out for a better deal.
B)The externality is large.
C)Only problems with a sufficiently large number of parties can be solved.
D)There is a lack of government intervention.

Question

Quizplus · Accepted Answer

The problem of holdout occurs when private solutions to an externality problem cannot be achieved because each party involved holds out for a better deal. This can prevent mutually beneficial agreements from being reached, leading to inefficient outcomes.

Which of the Following Is a Problem That Keeps People