In question 7 above, how large would the transaction costs need to be in order to ensure that no private solution to the problem can be found?
Question 7
Suppose an individual enjoys lawn care and gardening a great deal. He uses pesticides to control insects and the harmful residue drifts across the neighborhood. He values the use of the pesticides at $10,000 and the neighborhood values clean air at $15,000. What does the Coase theorem suggest will take place?