Which of the following suggests that the private market can be effective in dealing with externalities?
A) the 'invisible hand'
B) the law of diminishing social returns
C) the Coase theorem
D) the law of increasing social returns

Question

Quizplus · Accepted Answer

The Coase theorem suggests that the private market can effectively deal with externalities through negotiation and bargaining between affected parties, without the need for government intervention.

Which of the Following Suggests That the Private Market Can