The disagreement between A. C. Pigou and Ronald Coase arose because
A)Pigou argued that the government should ban all externality-generating activities, while Coase thought that taxes and subsidies should be used instead.
B)Coase argued that the government should ban all externality-generating activities, while Pigou thought that taxes and subsidies should be used instead.
C)Pigou argued that the government should use taxes and subsidies to adjust for externalities, while Coase proposed a market solution to the externality problem.
D)Coase argued that the government should use taxes and subsidies to adjust for externalities, while Pigou proposed a market solution to the externality problem.

Question

Quizplus · Accepted Answer

Pigou advocated for government intervention through taxes and subsidies to correct for externalities, while Coase suggested that under certain conditions, private parties could negotiate solutions to externalities on their own, without needing government intervention.

The Disagreement Between A