Which of the following statements describes the Coase Theorem?

Question

Quizplus · Accepted Answer

The Coase Theorem states that under certain conditions, private parties can bargain and reach an efficient outcome regarding externalities without government intervention. Specifically, if property rights are well-defined, bargaining costs are negligible, and there are no obstacles to communication, then private parties can arrive at a mutually beneficial outcome regardless of the initial assignment of property rights. Therefore, private solutions to the problems that result from externalities can be found. The other options are not correct as they do not describe the Coase Theorem.

Which of the Following Statements Describes the Coase Theorem