When property rights are assigned and transactions costs are low
A) all costs and benefits are taken into account by the transacting parties so the transaction is efficient.
B) externalities will lead to market failure.
C) the marginal social benefit curve shifts leftward.
D) the marginal social cost curve shifts rightward.

Question

Quizplus · Accepted Answer

When property rights are assigned and transaction costs are low, parties can negotiate to internalize externalities, leading to efficient outcomes as all costs and benefits are considered.

When Property Rights Are Assigned and Transactions Costs Are Low