In $2017,$ Santa Barbara County, California decided to allow commercial farming of marijuana. Joan Esposito, who lives near greenhouses where the drug is being grown, complained: "That smell is in

the carpet. You can smell it on the towels." Realtor Gary Goldberg had to lower the selling price of a condo by $$18,000$ after a potential buyer complained about a "persistent skunky smell."

Source: Zusha Elinson, "Fights Over Where to Grow Marijuana Cause Stink in California," Wall Street Journal, September $12,2021.$

Did Gary Goldberg properly use the Coase theorem in his decision to lower the price of a condo by $$18,000?$

A$.$ No$,$ because the negative externality affects everyone in Santa Barabara County, not just one individual, so the Coase theorem does not apply.

B$.$ Yes, the Coase theorem states that in the presence of low transactions costs, private bargaining will result in an efficient solution to the externality.

C$.$ Yes, the Coase theorem states that those who are negatively impacted by an externality should be compensated for their increased costs.

D$.$ No$,$ because the seller of the condo was not compensated for the negative externality caused by the "persistent skunky smell."