In a scenario where a barking dog causes a negative externality, the owner values the dog at \$800, and the neighbor incurs a cost of \$600 due to the noise. If the neighbor has property rights, what is a possible efficient solution?

• A. The owner pays the neighbor \$800 to keep the dog.
• B. The neighbor pays the owner \$600 to get rid of the dog.
• C. No payment is made, and the neighbor tolerates the noise.
• D. The owner pays the neighbor \$700 to keep the dog.

Answer: (D)