A competitive firm pollutes the air. Consider three possible legal rules: A. The firm can pollute as much as it wants to with no penalty. B. The firm must pay a fine equal to the amount of damage it causes; this fine is paid to the mayor's brother. C. The firm must compensate the neighbors for all the damage it causes. Suppose it is extremely expensive for the neighbors to move away or to protect themselves from the pollution in any way. Then which of the three legal rules above leads to an efficient outcome? Answer in each of the following four scenarios, and justify your answers: 1. Very high transactions costs all around. 2. Zero transactions costs between the firm and the neighbors; very high transactions costs between the firm and the mayor's brother. 3. Very high transactions costs between the firm and the mayor's brother; zero transactions costs between the firm and the neighbors. 4. Zero transactions costs all around