Incomplete property rights create transactions costs because
A) any party wanting to use the disputed resource does not have a fixed group with which to bargain.
B) the use of the disputed resource cannot be fully monitored by the government.
C) no one can prevent people from using the disputed resource for free.
D) others may receive a higher value from the disputed resource that those who own the property right to it.

Question

Quizplus · Accepted Answer

Incomplete property rights mean that there is uncertainty about who has the right to use a particular resource, which creates transactions costs because any party wanting to use the resource does not have a fixed group with which to bargain. This leads to negotiations and potential disputes, which can be costly in terms of time, resources, and legal fees.

Incomplete Property Rights Create Transactions Costs Because