The cost of producing one more unit of a good or service is equal to its

In which of these situations would the Coase theorem be MOST likely to work?

A) A thousand firms use a lake, there are no other users, all their costs could be reduced somewhat by polluting, but all would have lower water intake costs if the lake were clean. B) A group of nine firms use a lake, there are no other users, all their costs could be reduced somewhat by polluting, but all would have lower water intake costs if the lake were clean. C) Worldwide deep sea fishing rights need to be negotiated among thousands of fishermen from different countries. D) One hundred and fifty nations need to come to an accord about CFC generation to combat ozone depletion. E) A group of chemical firms high upstream on the Mississippi River have emissions that affect not only communities downstream along the river, but around the Gulf of Mexico as well.

Suppose the price of cheese rises. In the market for pizza, one would expect that

A) the supply of pizza would increase, and the price would fall. B) the demand for pizza would increase, and the price would increase. C) the demand for pizza would decrease, and price would fall. D) the supply of pizza would decrease, and price would rise.