The Coase Theorem Asserts That Private Economic Actors Can Solve

question 30

True/False

The Coase theorem asserts that private economic actors can solve the problem of externalities among themselves, without government intervention, regardless of whether those actors incur significant costs in reaching and enforcing an agreement.

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Definitions:

Decreasing-Cost Industry

Industry whose long-run supply curve is downward sloping.

Long-Run Industry Supply Curve

A graphical representation showing the relationship between the price of a good and the total output of the industry over time, accounting for adjustments in all input factors.

Wrongful Act

An action that infringes on the rights of another, giving rise to a legal claim by the affected party.

Offense

An illegal act or crime; a breach of a law or rule.