If the government assigns private property rights to a common resource, then the
A) marginal private cost becomes equal to the marginal social cost.
B) government needs to set a quota to achieve efficiency.
C) resource is underutilised.
D) None of the above answers is correct.

Question

Quizplus · Accepted Answer

Assigning private property rights to a common resource aligns the incentives of the property owners with the social interest, as owners bear the cost of overuse or depletion. This makes the marginal private cost of using the resource equal to the marginal social cost, promoting efficient use and mitigating the tragedy of the commons.

If the Government Assigns Private Property Rights to a Common