Changes in property rights will not affect the allocation of resources as long as transactions costs are zero and the subsequent effects on market demand are negligible.

Question

Quizplus · Accepted Answer

According to the Coase Theorem, if transaction costs are zero and property rights are well-defined, resources will be allocated efficiently regardless of the initial allocation of property rights, assuming negligible effects on market demand.

Changes in Property Rights Will Not Affect the Allocation of Resources