Question

Suppose that a chicken farm uses a nearby stream to dispose of the wastes released by its chickens. These wastes flow downstream into a lake that has become thick with algae and polluted due to the minerals in the waste matter. The local office of a nonprofit environmental organization successfully lobbies state regulators to stop the farm's pollution.
It's important to note that sometimes private solutions to externalities do not work. For example, this occurs when communications barriers or social customs are important enough relative to the potential gains involved that _____.

Answer 1

Answer:

Suppose that a chicken farm uses a nearby stream to dispose of the wastes released by its chickens. These wastes flow downstream into a lake that has become thick with algae and polluted due to the minerals in the waste matter. The local office of a nonprofit environmental organization successfully lobbies state regulators to stop the farm's pollution.

It's important to note that sometimes private solutions to externalities do not work. For example, this occurs when communications barriers or social customs are important enough relative to the potential gains involved that a private solution is not feasible.

Explanation:

The type of private solution to the externality of pollution occurred in this case is  Charities , because the work done by a non-profit organization is a form of charity.

It is crucial to note that sometimes private solutions to externalities do not work for example, this occurs when one party repeatedly holds out for a better deal.This describes the problem of a breakdown in bargaining.