The Coase theorem is the idea that:
A) individuals can reach an efficient equilibrium through private trades, even in the presence of an externality.
B) there are always mutually beneficial trades waiting to be exploited, and that creates a clear role for government taxation.
C) the actions of private individuals and firms are insufficient to ensure efficient markets.
D) None of these statements is true.

Question

Quizplus · Accepted Answer

The Coase theorem suggests that individuals can reach an efficient equilibrium through private trades, even in the presence of an externality.

The Coase Theorem Is the Idea That