Near an ocean beach, a high-rise building is being constructed that will block the scenic view of the ocean by the residents of a low-rise building.The Coase Theorem suggests that this type of dispute between the owners of high-rise and low-rise buildings would best be resolved by:
A)the owners themselves.
B)city government officials.
C)a zoning ordinance restricting high-rise buildings.
D)a government fine for the builder of the high-rise.

Question

Quizplus · Accepted Answer

According to the Coase Theorem, the dispute should be resolved by the owners themselves through negotiation and bargaining. The owners could potentially come to an agreement where the high-rise building is constructed in a way that doesn't completely block the view of the ocean for the residents of the low-rise building. This would be a more efficient and cost-effective solution than involving city government officials or imposing fines on the builder. A zoning ordinance restricting high-rise buildings would also not be a desirable solution as it limits property rights and may not be the most efficient outcome for both parties involved.

Near an Ocean Beach, a High-Rise Building Is Being Constructed