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【单选题】
Suppose that Bill wants to dine at a fancy restaurant, but the only available table is in the smoking section. Bill dislikes the smell of cigarette smoke. He notices that only one person, Peter, is smoking in the smoking section. Bill values the absence of smoke at $15. Peter values the ability to smoke in the restaurant at $5. Which of the following represents an efficient solution in the absence of transaction costs?A.
Peter continues to smoke because he has a right to smoke in the smoking section.
B.
Bill offers Peter between $5 and $15 not to smoke. Peter accepts, and both parties are better off.
C.
Bill offers Peter between $5 and $15 not to smoke. Peter declines because he has a right to smoke in the smoking section.
D.
Only a government policy banning smoking in restaurants will solve this problem.
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