When Does the Coase Theorem Suggest That Private Markets May

question 10

Multiple Choice

When does the Coase theorem suggest that private markets may NOT be able to solve the problem of externalities

• A)when the number of interested parties is large and bargaining costs are high
• B)when government does not actively become involved in the process
• C)when the firm in the market is a monopoly
• D)when some people benefit from the externality