According to the Coase theorem,if transactions costs are low and property rights exist,
A)negative externalities cause deadweight losses.
B)positive externalities cause deadweight losses.
C)private transactions are efficient.
D)public transactions are efficient.
E)the efficient level of pollution will be zero.

Question

Quizplus · Accepted Answer

The Coase theorem suggests that if property rights are well-defined and transactions costs are low, private transactions will be efficient in reaching an agreement that maximizes social welfare, regardless of the initial assignment of property rights. This means that parties can negotiate and arrive at an efficient outcome without the need for external intervention or government regulation. As a result, negative externalities can be internalized through private negotiations, minimizing deadweight losses. Positive externalities can also be taken into account by parties negotiating terms that are mutually beneficial. Therefore, private transactions are efficient in such a scenario.

According to the Coase Theorem,if Transactions Costs Are Low and Property