According to the Coase theorem,if the appropriate property right is assigned to __________,an efficient solution to an externality problem will be achieved.
A)the party that has a higher marginal social cost
B)the party that has a lower marginal social cost
C)the party that has a higher marginal private benefit
D)the party that has a lower marginal private benefit
E)either one of the parties involved

Question

Quizplus · Accepted Answer

The Coase theorem states that an efficient solution to an externality problem can be achieved through bargaining and negotiation between the parties involved, as long as property rights are well-defined and transferable. It does not specify which party should be assigned the property right, and thus, either one of the parties involved could be assigned the property right to achieve an efficient solution. However, it is important to note that the assignment of property rights should be done in a way that reflects the true costs and benefits of the parties involved.

According to the Coase Theorem,if the Appropriate Property Right Is