The Coase theorem implies that:

Question

Quizplus · Accepted Answer

The Coase theorem states that if property rights are well-defined and transaction costs are low, then private individuals can bargain and achieve a socially optimal solution without the need for government intervention. Option A is incorrect because the Coase theorem assumes low bargaining costs. Option C is incorrect because the Coase theorem states that government intervention is not always necessary. Option D is incorrect because it describes the socially optimal output and not the Coase theorem.

The Coase Theorem Implies That