Refer to Figure 16.4. Suppose the government assigns property rights to the residents of Playa Del Rey, then the airlines and the residents engage in negotiations. The ________ of air travel is 100 units.

A) minimum allowable level
B) resulting efficient level
C) government-regulated level
D) maximum allowable level

The resulting efficient level of air travel, after the assignment of property rights to the residents and subsequent negotiations between the airlines and residents, would be 100 units. This outcome is based on the Coase Theorem, which posits that if property rights are clearly defined and transaction costs are low, the allocation of resources will be efficient regardless of who holds the rights initially.