In what way can liability rules lead to a more efficient outcome?
What will be an ideal response?
Liability rules are designed to force decision makers to internalize an externality. They provide an incentive for individuals to weigh both the actual and potential costs and benefits of their actions.
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For a perfectly competitive firm, as its output increases its marginal revenue ________ and its marginal cost ________
A) changes; changes B) changes; does not change C) does not change; changes D) does not change; does not change
A monopoly is a sole ___________, and a monopsonist is a sole ___________
a. buyer in a goods market; seller in a goods market b. seller in a goods market; seller in a labor market c. buyer in a goods market; seller in a labor market d. seller in a goods market; buyer in a labor market e. seller in a labor market; buyer in a goods market