According to the Coase Theorem,private solutions to externalities can lead to the socially efficient outcome when:
i.transaction costs are negligible
ii.property rights are clearly defined
iii.the number of parties involved is small
A) (i), (ii), and (iii)
B) (i) and (ii) only
C) (iii) only
D) (ii) and (iii) only

Question

Quizplus · Accepted Answer

The Coase Theorem suggests that private bargaining can lead to efficient outcomes when transaction costs are negligible, property rights are clearly defined, and the number of parties involved is small, as these conditions facilitate negotiation and agreement.

According to the Coase Theorem,private Solutions to Externalities Can Lead