The Coase Theorem is the proposition that if the number of involved parties is low, if property rights _______ and transactions costs are _______, then private transactions are efficient.
A) exist; low
B) are nonexistent; low
C) exist; high
D) are nonexistent; high

Question

Quizplus · Accepted Answer

The Coase Theorem posits that private transactions can efficiently solve the problem of externalities as long as property rights are clearly defined (exist) and the costs associated with transactions are low. This allows parties to negotiate solutions that maximize economic efficiency.

The Coase Theorem Is the Proposition That If the Number