The Coase Theorem Asserts That the Private Market Will Always

question 68

Multiple Choice

The Coase theorem asserts that the private market will always solve the problem of externalities and allocate resources efficiently

• A)even if private parties experience substantial costs of bargaining.
• B)even if the initial distribution of legal rights is skewed in favor of some private parties over others.
• C)only when there is a large number of private parties that engage in bargaining.
• D)All of the above are correct.

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