According to the Coase theorem, an externality always requires government intervention in order to internalize the externality.

Name: According to the Coase theorem, an externality always requires government intervention in order to internalize the externality.
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Quizplus · Accepted Answer

The Coase theorem suggests that in the absence of transaction costs, private parties can negotiate and internalize externalities themselves without the need for government intervention.

According to the Coase Theorem, an Externality Always Requires Government