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Levi's tree, which he values at $250, shades the garden of his next door neighbor, Owen. Owen's garden therefore grows less vegetables, at a loss
Levi's tree, which he values at $250, shades the garden of his next door neighbor, Owen. Owen's garden therefore grows less vegetables, at a loss of $150 to Owen. Current city laws allow Levi to grow any tree he wants on his property. An efficient Coase bargaining solution would be to have
A. Owen pay Levi $200 to remove his tree.
B. Owen pay Levi $100 to remove his tree.
C. Levi pay Owen $200 and keep his tree.
D. Levi pay Owen $100 and keep his tree.
E. Owen accept that the tree will stay there.
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