According to the Coase theorem,how is an efficient outcome reached
A)Interested parties can reach an outcome in which everyone is better off through private bargaining.
B)The outcome reached through private bargaining will be inefficient.
C)Interested parties will need an arbitrator in order to reach an agreement that is efficient.
D)The government will need to participate in the bargaining process.

Question

Quizplus · Accepted Answer

The Coase theorem states that if there are no transaction costs and property rights are clearly defined, interested parties can reach an efficient outcome through private bargaining. This means that interested parties will negotiate and reach a solution that benefits all parties without the need for an arbitrator or government intervention. Therefore, answer choice A is the correct answer.

According to the Coase Theorem,how Is an Efficient Outcome Reached