According to the Coase theorem, private markets will solve externality problems and allocate resources efficiently as long as agovernment assigns property rights to the harmed party. bthe externalities that are present are positive, not negative. cprivate parties can bargain with sufficiently low transaction costs. dbusinesses determine an appropriate level of production.

The Coase theorem, named after economist Ronald Coase, is a legal and economic theory that asserts that where there are complete competitive markets with no transaction costs, an efficient set of inputs and outputs to and from production-optimal distribution are selected, regardless of how property rights are divided.

The theorem states that as long as property rights are clearly defined, private parties can resolve disputes over the allocation of resources themselves, without government intervention. This is because they can negotiate and reach an agreement that will lead to an efficient outcome.

So, the correct answer to your question is: c) private parties can bargain with sufficiently low transaction costs.

This is because the Coase theorem assumes that these parties can negotiate without cost. However, in the real world, there are often significant transaction costs, such as legal fees, which can prevent efficient bargaining.

The other options are not entirely correct. While the assignment of property rights (option a) can help to solve externality problems, it is not the only factor. The presence of positive or negative externalities (option b) does not affect the theorem's applicability. And businesses determining an appropriate level of production (option d) is a result of the bargaining process, not a prerequisite for it.