Assume that your roommate,Vanessa,is very messy and that she has the right to be messy.Suppose she gets a $100 benefit from being messy but imposes a $200 cost on you.What would the Coase theorem suggest would be an efficient solution for you
A)to pay your roommate $99.99 to clean up after herself
B)to pay your roommate at least $100 but no more than $200 to clean up after herself
C)to pay your roommate at least $201 to clean up after herself
D)to charge your roommate at least $100 to have you clean up after her

Question

Quizplus · Accepted Answer

The Coase theorem suggests that if transaction costs are low and property rights are well-defined, parties can negotiate to reach an efficient outcome. You could pay Vanessa between $100 and $200 to clean up, as this range covers her benefit and your cost, leading to a mutually beneficial agreement.

Assume That Your Roommate,Vanessa,is Very Messy and That She Has