According to Ronald Coase, allocation of resources in a free-market economy will be efficient as long as:

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According to Ronald Coase, allocation of resources in a free-market economy will be efficient only if property rights are clearly assigned and enforced with low contracting costs. Without clear and well-enforced property rights, transactions costs can make it difficult for individuals to fully realize the value of their resources or engage in mutually beneficial exchanges, which can lead to market inefficiencies. Additionally, Coase recognized that in certain circumstances, such as situations involving externalities, some form of government intervention may be necessary to achieve efficient outcomes.

According to Ronald Coase, Allocation of Resources in a Free-Market