Whenever there are negative or positive externalities,the Coase theorem suggests that it is economically efficient for the government to intervene to resolve the externality problem.

Question

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The Coase theorem states that if property rights are well-defined and transaction costs are low, private parties can negotiate and reach an efficient solution to externalities without the need for government intervention. Therefore, it may not be necessary for the government to intervene in all cases of externalities.

Whenever There Are Negative or Positive Externalities,the Coase Theorem Suggests