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A takes an action that imposes a cost upon B. In order to make A take the action if and only if it produces net

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A takes an action that imposes a cost upon B. In order to make A take the action if and only if it produces net benefits socially, we must somehow transfer the external cost back to A. Pigou's solution to this problem was to rely on the price system and [Select ] V Coase's claim in response to Pigou is that the source of inefficiency from externalities is [ Select ]

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