The Coase Theorem is the proposition that private economic transactions are efficient if the number of involved parties is small, if property rights ________, and transactions costs are ________.
A) exist; high
B) exist; low
C) do not exist; high
D) do not exist; low

Question

Quizplus · Accepted Answer

The Coase Theorem suggests that if property rights exist and transaction costs are low, parties can negotiate to correct externalities and reach an efficient outcome.

The Coase Theorem Is the Proposition That Private Economic Transactions