The Coase Theorem Will Apply Only If

question 48

Multiple Choice

The Coase theorem will apply only if

• A) the courts can be used to determine the amount of compensation that must be made to the damaged party.
• B) the amount of compensation that must be made to the damaged party is small.
• C) the number of people involved is small.
• D) an individual who is not affected by the externality can negotiate a settlement between the parties imposing the externality and the parties that are harmed by the externality.

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