Answer
c) Transaction costs make negotiating difficult
Work Step by Step
The Coase Theorem holds that, regardless of the initial allocation of property rights, bargaining will lead to an efficient/socially optimal outcome to correct an externality when property rights have been clearly assigned and there are no transaction costs between the parties. If there are high transaction costs, such as travel or the opportunity cost of getting into contact with a company's executives, this will deter individuals from bargaining in the first place.
