Answer:
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.
