What Does the Coase Theorem Suggest About Private Solutions to the Externality

question 182

Multiple Choice

What does the Coase theorem suggest about private solutions to the externality problem

• A)They will always allocate resources efficiently if private parties can bargain without cost.
• B)They are effective under all conditions.
• C)They are only efficient when there are negative externalities.
• D)They may not be possible because of the distribution of property rights.