What economic argument suggests that if transactions costs are sufficiently low, the post-bargaining equilibrium is economically efficient regardless of how property rights are distributed?
A)the Coase theorem
B)the laws of supply and demand
C)the law of comparative advantage
D)the law of externalities

Question

Quizplus · Accepted Answer

The Coase theorem suggests that if transactions costs are sufficiently low, the post-bargaining outcome will be economically efficient regardless of how property rights are distributed. This implies that the allocation of resources will be efficient as long as the parties involved can negotiate and make mutually beneficial agreements without incurring high transaction costs. Therefore, option A is the correct answer.

What Economic Argument Suggests That If Transactions Costs Are Sufficiently