The result that,under certain circumstances,no government action is needed to control an externality because it can be eliminated by bargaining between the affected parties is called
A)a Nash equilibrium.
B)Coase Theorem.
C)Bargaining Theorem.
D)English Bargaining.

Question

Quizplus · Accepted Answer

The result described in the question is known as the Coase Theorem, which states that under certain conditions, private bargaining between parties affected by an externality will lead to an efficient outcome with or without governmental intervention. Therefore, option B is the correct answer. The other options are either irrelevant or incorrect.

The Result That,under Certain Circumstances,no Government Action Is Needed to Control