Which of the following conditions are necessary for the Coase theorem to apply?
A) The basic rights of the individuals must be clearly understood.
B) There must be no impediments to bargaining.
C) Only a few people can be involved.
D) all of the above

Question

Quizplus · Accepted Answer

The Coase theorem applies when property rights are clearly defined (A), there are no costs to bargaining (B), and it does not limit the number of people involved, but in practice, it's more easily applied or observed with fewer people due to lower transaction costs (C). Thus, all the conditions listed are necessary for the Coase theorem to apply effectively.

Which of the Following Conditions Are Necessary for the Coase