Near an ocean beach,a high-rise building is being constructed that will block the scenic view of the ocean by the residents of a low-rise building.The Coase theorem suggests that this type of dispute between the owners of high-rise and low-rise buildings would best be resolved by:
A) the owners themselves.
B) city government officials.
C) a zoning ordinance restricting high-rise buildings.
D) a government fine for the builder of the high-rise.

Question

Quizplus · Accepted Answer

The Coase theorem suggests that if property rights are well-defined and transaction costs are low, parties can negotiate and come to a mutually beneficial agreement without the need for government intervention. In this case, the owners of the high-rise and low-rise buildings could negotiate a compensation or agreement to preserve the scenic view. Therefore, the best choice would be the owners themselves.

Near an Ocean Beach,a High-Rise Building Is Being Constructed That