The Coase theorem is the proposition that if property rights exist, the number of parties is small, and transactions costs are low
A) external costs result in deadweight losses.
B) external benefits result in deadweight losses.
C) private transactions are efficient.
D) public transactions are efficient.

Question

Quizplus · Accepted Answer

The Coase theorem suggests that when property rights are well-defined and transaction costs are low, private parties can negotiate to resolve externalities efficiently without government intervention.

The Coase Theorem Is the Proposition That If Property Rights