According to the Coase Theorem, Private Parties Can Solve the Problem

question 22

Multiple Choice

According to the Coase theorem, private parties can solve the problem of externalities if

• A)the cost of bargaining is small.
• B)the initial distribution of legal rights favors the person being adversely affected by the externality.
• C)the number of parties involved is sufficiently large.
• D)All of the above are correct.

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