The I Don't Care Corporation dumps pollution into the river that Mike uses for his fishing operation. The efficient level of pollution could prevail if government:

Question

Quizplus · Accepted Answer

Assigning property rights to either the polluter (I Don't Care Corporation) or the affected party (Mike) could lead to an efficient level of pollution through negotiation or compensation, as per the Coase Theorem. This theorem suggests that if property rights are clearly defined and transaction costs are low, parties can negotiate to correct externalities like pollution, regardless of who holds the rights.

The I Don't Care Corporation Dumps Pollution into the River