If ________ bargaining to resolve an externality is to result in an efficient outcome, the initial assignment of rights must be clear to ________ parties.

A) public; only government-sponsored
B) public; at least one
C) private; at least one
D) private; both

Private Bargaining

The process of negotiating terms directly between parties without external intervention.

Externality

An outcome from economic behavior that impacts individuals not directly involved, which may be beneficial or harmful.

Initial Assignment

The initial distribution or allocation of tasks, responsibilities, or resources at the start of a project or process.