The Coase Theorem points out that externality problems can be eliminated if the number of parties involved is small and if property rights
A) are granted solely to consumers.
B) are granted solely to producers.
C) are eliminated.
D) are granted to either consumers or producers and transactions costs are low.

Question

Quizplus · Accepted Answer

The Coase Theorem suggests that if property rights are clearly defined and transaction costs are low, parties can negotiate to resolve externalities regardless of who holds the rights.

The Coase Theorem Points Out That Externality Problems Can Be