The proposition that if transaction costs are low enough, the private market can achieve an efficient outcome regardless of which of the affected parties hold the property rights is known as the:
A)Coase theorem.
B)property rights paradigm.
C)market rights theorem.
D)green environment paradigm.

Question

Quizplus · Accepted Answer

This is known as the Coase theorem, which states that when transaction costs are low, parties will bargain and reach an efficient outcome regardless of the initial assignment of property rights.

The Proposition That If Transaction Costs Are Low Enough, the Private