According to the Coase theorem,if private parties can bargain without cost,then the private market will always solve the problem of externalities.

Question

Quizplus · Accepted Answer

The Coase theorem suggests that if transaction costs are low, then private parties can negotiate and come to an efficient solution for externalities, without the need for government intervention. Therefore, the answer is true, if private parties can bargain without cost, then the private market will always solve the problem of externalities. However, in reality, transaction costs are not always low, and bargaining can be difficult, resulting in inefficient outcomes.

According to the Coase Theorem,if Private Parties Can Bargain Without