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Consider a polluting factory and its neighbours. The government introduces a regulation that requires the factory to ask its neighbours for permission to pollute. Which
Consider a polluting factory and its neighbours. The government introduces a regulation that requires the factory to ask its neighbours for permission to pollute. Which statement is consistent with the Coase theorem?
1.The factory closes down because switching to clean production is too expensive
2.The factory switches to clean production
3.The factory pays neighbours to compensate them for the pollution
4.Demand for the factory product goes down due to the higher cost of production
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