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If Bargaining Is Costless and an Externality Exists

Question 9

Multiple Choice

If bargaining is costless and an externality exists:


A) an efficient outcome may be reached depending on which party is assigned property rights.
B) an efficient outcome will be reached regardless of which party is assigned property rights.
C) an efficient outcome will not be reached without government intervention.
D) an efficient outcome can never be reached.

Correct Answer:

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