The Coase Theorem Says That Private Bargains Can Ensure an Efficient

question 241

Multiple Choice

The Coase theorem says that private bargains can ensure an efficient market equilibrium even when externalities exist if:

• A) the government does not involve itself in the process.
• B) the market is sufficiently competitive.
• C) the number of market participants is large.
• D) transaction costs are low and property rights are clearly defined.

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