According to the Coase Theorem, When Negative Externalities Are Present

question 189

Multiple Choice

According to the Coase theorem, when negative externalities are present, a market will:

• A) always reach an efficient solution.
• B) reach an efficient solution if transaction costs are low and property rights are well-defined.
• C) reach an efficient solution only if the government intervenes in the market.
• D) reach an efficient solution only if the negative externalities are offset by positive externalities.

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