Which of the following is one problem that keeps people from privately solving externalities?
A)each party involved holds out for a better deal
B)an efficient bargain price is unattainable
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

One key problem that hinders private parties from solving externalities on their own is that each party involved may hold out for a better deal, leading to a failure in reaching an agreement. This is known as the holdout problem, where each side waits for the other to make a more favorable offer, thus preventing efficient solutions to externalities.

Which of the Following Is One Problem That Keeps People