According to the Coase theorem, part of what is needed for private transactions to be efficient is that property rights
A) must be defined, but it does not matter who owns the property.
B) must be defined, and it is crucial as to who owns the property.
C) need not be defined as long as there are no transactions costs present.
D) need to be defined by the government to avoid producers from exploiting high transactions costs.

Question

Quizplus · Accepted Answer

The Coase theorem states that if property rights are well-defined and transaction costs are low, private parties can negotiate to reach an efficient outcome regardless of who initially owns the rights.

According to the Coase Theorem, Part of What Is Needed