Suppose that Megan has just finished smoking a cigarette and is thinking about throwing the cigarette butt onto her neighbor Larry's driveway. Although no police officers are around, she instead decides to carry it to a trash can because she doesn't want to embarrass herself by letting people see her littering. Which of the following types of private solutions to the externality of littering has occurred in this case?

a. Contracts
b. Integration of different types of businesses through merger or acquisition
c. Charities
d. Moral codes and social sanctions

It’s important to note that sometimes private solutions to externalities do not work. For example, this occurs when the number of parties involved is so large that it makes

a. government action the only viable solution
b. coordinating negotiations among all of the parties too costly
c. the market failure from the externality unimportant.