The Coase theorem says that, if the appropriate property right is assigned to __________, an efficient solution to an externality problem will be achieved.
A)the party causing the externality
B)the victim of the externality
C)the party that can avoid the externality at the higher cost
D)the party that can avoid the externality at the lower cost
E)either one of the parties involved

Question

Quizplus · Accepted Answer

The Coase theorem posits that if property rights are clearly defined and transaction costs are negligible, parties can negotiate to reach an efficient outcome regardless of who holds the initial property rights.

The Coase Theorem Says That, If the Appropriate Property Right