Lecture note Public finance (10th Edition) - Chapter 5: Externalities
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Chapter 5 summary: Externalities occurs when the activity of one person or firm positively or negatively affects another person/group/firm outside the market mechanism; an inefficient allocation of resources results because the market price does not reflect the external costs or benefits; the coase theorem indicates that private solutions through bargaining can achieve the efficient outcome under certain circumstances.
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Lecture note Public finance (10th Edition) - Chapter 5: Externalities
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Lecture note Public finance (10th Edition) - Chapter 5: Externalities
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