Coase Farm grows soybeans near property owned by Taggart Railroad. Tagart can build zero, one, or two railroad tracks adjacent to Coase Farm, yielding a net present value of $0, $9 million, or $12 million. Value of Taggart Railroad (in millions) As a Function of the Number of Train Tracks (before any damages) Zero tracks $ 0 One track 9 Two tracks 12 Coase Farm can grow soybeans on zero, one, or two fields, yielding a net present value of $0, $15 million, or $18 million befor any environmental damages inflicted by Taggart trains. Environmental damages inflicted by Taggart