Consider a factory that emits chemicals into a river, thus polluting the water supply of a downstream community. The Coase Theorem states that the socially optimal, or efficient, solution can be achieved by assigning property rights to _____________________.
a. the company.
b. the community.
c. the company and the community, jointly.
d. the company or the community.
e. a government regulator.
Answer: d. the company or the community.
Economics
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