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Mabel owns a small cottage by the lake. Big Boy's Sawmill is next door, and it dumps sawdust into a sinkhole it owns. Unfortunately for
Mabel owns a small cottage by the lake. Big Boy's Sawmill is next door, and it dumps sawdust into a sinkhole it owns. Unfortunately for Mabel, the sinkhole opens into a brook on her land, which gets clogged by the sawdust. It costs Mabel $3,000 per year to clean up the sawdust. Big Boys can dispose of the sawdust by having it hauled away for $2,000 per year. Mabel offers to pay Big Boy $2,500 per year to have the sawdust hauled away. In this example of the Coase theorem, what is the negative externality? Group of answer choices the cabin the sawdust the lake the sinkhole
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