Question: Suppose R ' s market activity generates $ 5 0 worth of bunefits for R , but imposes a 5 7 5 cost on 5

Suppose R

'

s market activity generates $

50

worth of bunefits for R

,

but imposes a

575

cost on

5,

whols external to the market. If S has a clearly defined right to demand that R discontinue the activity and tronsaction costs are walficiently low, what will be the resalt of private bargaining?

S will unsuccessfully offer to pay

R

to discontinut the activity.

S will successfully offer to pay R to discontinut the activity.

A wall unavccessfully ofler to pay $ for the riathe to continue the activity.

R will successfully offer to pay $ for the right to consinut the activity.

Suppose R ' s market activity generates $ 5 0

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