The Coase Theorem States That If Transaction Costs Are Low

question 35

Multiple Choice

The Coase theorem states that if transaction costs are low, the number of parties is small, and property rights are well established,

• A) private transactions are efficient.
• B) the government must intervene to eliminate any externalities in the market.
• C) there will be no pollution.
• D) Both answers B and C are correct.

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