The Coase Theorem States That

question 88

Multiple Choice

The Coase theorem states that

• A) the level of pollution should be equal to zero to maximize social net benefit.
• B) profit making producers pollute because they are forced to.
• C) the efficient level of output is where marginal external cost equals marginal external benefit.
• D) if property rights exist and transactions costs are low, private transactions are efficient.
• E) the best way to limit pollution is by taxing producers who pollute.

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