How do property rights affect externalities and market failure? a. externalities and market failure will result from incomplete property rightsfrom incomplete property rights. b. externalities and market failure will not occur when property rights are difficult to enforceproperty rights are difficult to enforce. c. externalities will be positive and market failure will not occur when property rights are enforced. d. externalities and market failure will result from producers having all the property rights. e. externalities will be positive and market failure will not occur when property rights are divided equally among market participants.

The correct answer is E. Externalities will be positive and market failure will not occur when property rights are divided equally among market participants.

Explanation:

Externalides are a market failure, since they are benefits that do not reflect their real market price.

When externalities occur and the market is allowed to operate freely, the individuals that cause those externalities will not be at their optimum.

Positive externalities occur when the action of a company or person benefits not only those directly involved, but also other people or companies that have not paid for it.

As external benefits we can point to health, research in new technologies such as computer science, electronics or aerospace.

The free market generates a subproduction of goods that generate external benefits that lead to an unrecoverable loss of social welfare and this leads to an inefficient market.

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