According to Coase,when thinking about solutions to externalities,it is important to remember that
A) only those indirectly involved need by considered.
B) government regulation in nearly always necessary.
C) only those directly involved need be considered.
D) externalities are reciprocal in nature.
E) those who generate external costs must be forced to stop.

Question

Quizplus · Accepted Answer

Coase's theorem suggests that externalities are reciprocal in nature, meaning that the problem of externalities involves both parties and can be resolved through negotiation without government intervention, assuming low transaction costs and clear property rights.

According to Coase,when Thinking About Solutions to Externalities,it Is Important